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TMI Blog1996 (8) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... is an odd case where the assessee questions the deductions in respect of depreciation allowed by the Income-tax Officer under section 32 of the Act for the two assessment years 1980-81 and 1981-82 on the ground that it did not raise any claim for such deductions in its returns for those two years. That it did not claim any such deductions in respect of depreciation under sub-section (1) of section 32 of the Act for those two years is not in dispute. It is also not in dispute that it did not furnish the prescribed particulars under sub-section (1) of section 34 of the Act. However, it claimed deductions under section 80J of the Act and also investment allowance. In the assessment orders under sub-section (3) of section 143 of the Act dated October 25, 1982, and December 16, 1982, in respect of the assessment years 1980-81 and 1981-82, respectively, the Income-tax Officer allowed admissible depreciation of Rs. 10,22,128 and Rs. 11,01,158 for the two assessment years, respectively, observing that the assessee had not claimed depreciation allowance in the profit and loss statement and, on the other hand, it had claimed deduction of section 80J and investment allowance to be set off bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 985] 155 ITR 711 holding that "the normal accountancy principle has to be applied in arriving at the net income from business for that year by debiting the current year's depreciation and that this is a basic and well recognised principle of commercial accountancy and that this principle cannot be deviated from unless a clear intention to the contra is manifested by the provisions of the Act. He also draws our attention to a decision of a Division Bench of this court dated March 7, 1994, in R. C. No. 58 of 1986 (CIT v. Andhra Cotton Mills Ltd. [1996] 219 ITR 404) relating to the same assessee, i.e., the respondent herein in respect of the assessment year 1979-80, and relies on the observations thereunder as follows : " But the current depreciation is a first charge on the profit as held by the Supreme Court in Mother India Refrigeration Industries P. Ltd.'s case [1985] 155 ITR 711 and that the charge cannot be ignored by withholding the particulars so as to avail of the setting off of the earlier year's loss which lapses by the prescribed period of limitation." Mr. Krishna Kaundinya placed before us the contrary views strongly expressed by the Division Benches of the Gujarat High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rticulars are furnished ... but this cannot be construed to mean that where the assessee deliberately withholds the information, no deduction for depreciation could be given in computing the income". Those observations were not really necessary for arriving at a decision in that case, because the Bench already held that the revised return was not a valid return, and that in the original return the assessee did claim deduction for depreciation and particulars were available because the profit and loss account providing for depreciation was filed along with the original return. We, therefore, find that those observations were only "obiter dicta". We may also observe that the Bench did not notice the circular of the Central Board of Revenue dated August 31, 1965, which directed that "where the required particulars have not been furnished by the assessee and no claim for depreciation has been made in the return, the Income-tax Officer should estimate the income without allowing depreciation allowance". In the present case, admittedly, the assessee did not claim deduction of depreciation. The record does not disclose that any particulars in that regard were furnished by the assessee or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, if the assessee failed to furnish the required information, there would be an ex parte assessment. Thereupon, the assessee furnished particulars relating to depreciation under protest. Thus, that was not a case where the prescribed particulars were not furnished. Therefore, when the prescribed particulars had been furnished, the Income-tax Officer shall allow the depreciation allowance as per section 34(1) of the Act. The facts of that case are very different from the facts of the present case. In Ascharajlal Ram Parkash's case [1973] 90 ITR 477, a Division Bench of the Allahabad High Court held that there was no requirement in section 34 of the Act that the prescribed particulars must be furnished in a particular document, and that merely because the form of the return provided for a place where the statement of such particulars should be set out, it did not mean that in the absence of such statement, the Income-tax Officer had no power to allow depreciation, if, in the course of assessment proceedings, he came to know of the relevant particulars necessary for the grant of deduction. In that case, the court observed that there was no dispute that during the course of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the view taken by the Madras High Court in Dasaprakash Bottling Co. [1989] 122 ITR 9. The Bombay High Court agreed with the view taken by the Punjab and Haryana High Court in Beco Engineering Co. Ltd. [1984] 148 ITR 478. Finally, the Bombay High Court held that the assessee had a choice to claim or not to claim depreciation allowance, and if the assessee chose not to claim it, the Income-tax Officer was not entitled to allow a deduction on account of depreciation. A similar view was taken by the Punjab and Haryana High Court in Friends Corporation's case [1989] 180 ITR 334, holding that the allowance for depreciation was a benefit available to the assessee to claim but not one that could be thrust upon him against his wishes. Having said so, the court then observed that in order to claim depreciation, the assessee must furnish the requisite particulars as prescribed by the Income-tax Act and the Rules made thereunder ; and in the absence of such particulars the assessee could not avail of, nor, indeed, could he be entitled to depreciation. It referred to its earlier decision in Beco Engineering Co. Ltd. [1984] 148 ITR 478 (P&H) and further observed as follows (page 335 of 180 IT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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