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TMI Blog1992 (10) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... depreciation on trucks even though the said trucks were not registered in the assessee's name ? 2. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that the assessee would be entitled to depreciation at 40 per cent. in respect of truck No. MHG 7405 which was purchased during the year under consideration ?" The assessee was carrying on transport business. He purchased two trucks, namely, Nos. MHB 5375 and MHG 7586, for Rs. 70,000 and Rs. 1,01,388, respectively, during the accounting year. In respect of, the first truck, he paid Rs. 35,000 on October 12, 1978, and the balance of Rs. 35,000 on November 27, 1978, by taking a loan from Messrs. Jaika Automobiles, which was repaid in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the rate of 40 per cent. in accordance with item No. (1A) appearing under heading III(ii)E of Appendix I to the Income-tax Rules, 1962, as amended by the Income-tax (Fifth Amendment) Rules, 1980, with effect from July 24, 1980. By this amendment, the rate of depreciation was raised from 30 per cent. to 40 per cent. The assessment year in the instant case was 1980-81. The Income-tax Officer held that the higher rate of depreciation was not applicable to the assessment in question on the ground that the said higher rate came into force only with effect from July 24, 1980. On appeal, the Appellate Assistant Commissioner took a contrary view. He agreed with the assessee and allowed depreciation at the higher rate. The decision of the Appellate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Following this decision, question No. 1 has to be answered in the affirmative and in favour of the assessee. As regards the second question, it may be observed that the law is well-settled that the Income-tax Act, 1961, as it stands amended on the 1st day of April of any financial year, applies to the assessment of that year. Any amendment in the Act or the rules which come into force after the 1st day of April of a financial year would not apply to the assessment of that year, even if the assessment is actually made after the amendments come into force ( see Karimtharuvi Tea Estate Ltd. v. State of Kerala [1966] 60 ITR 262 (SC)). In the instant case, the assessment year is 1980-81. So, the law as it stood on the 1st day of April, 1980 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stly, it is submitted that the amendment made on July 24, 1980, should be deemed to be retrospective in its operation. We find it difficult to accept this submission because the Income-tax Act itself, while conferring rule making power on the Board, has empowered the Board by making specific provision in section 295(4), to give retrospective effect to any rule. This power is subject to the only restriction that no retrospective effect should be given to any rule so as to prejudicially affect the interest of the assessee. Therefore, if the Board wanted to make the amendments in the rules made by it on July 24, 1980, applicable to the assessment year 1980-81, it could have made the amendment Rules effective from 1st April, 1980, instead of br ..... X X X X Extracts X X X X X X X X Extracts X X X X
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