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TMI Blog2008 (5) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... None appeared for the assessee. JUDGMENT The judgment of the court was delivered by D.A.MEHTA J.- 1. The Income Tax Appellate Tribunal, Ahmedabad Bench-C has referred the following question for the opinion of this Court under sec. 256(2) of the Income Tax Act, 1961 (the Act), at the instance of the Revenue. "Whether, the Appellate Tribunal is right in law and on facts in confirming the order made by the CIT(A) allowing the assessee's claim for depreciation and investment allowance at the higher rate on proportionate basis when the provisions of Rule 5 had been deleted with effect from 2.4.1987 ?" 2. The assessee, a registered firm claimed depreciation for a period commencing from 3.11.1986 to 31.3.1988 in relation to Assessment Year 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidering the provisions applicable for transitional previous year. It was submitted that one Rule 5 of the Rules was substituted with effect from 2.4.1987 both, Commissioner (Appeals) and Tribunal, were in error in allowing the claim for a period of 17 months. 6. Though served, there is no appearance on behalf of respondent assessee. 7. At first blast, the submission made on behalf of the applicant-Revenue appears to be attractive. However, when considers the scheme of the Act, it becomes apparent that the issue requires a closer scrutiny and for the reasons stated hereinafter, the issue is required to be decided by the Tribunal afresh. 8. Section 32 of the Act deals with depreciation in respect of the assets mentioned therein which are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar' in light of section 3(4) of the Act and income of such an assessee for a period of thirteen months or more is included in his total income of any previous year depreciation allowance shall have to be calculated by increasing the allowance by using multiplying fraction as provided in the Proviso. 10. Hence, if provisions of Section 32 of the Act and Rule-5 of the Rules are read in isolation, what is contended by the Revenue may become acceptable. But, section 3 of the Act, more particularly sub-section (4) of the said section, has not been either amended or substituted with effect from 1.4.1988 or 2.4.1987. In fact, section 3 of the Act has been substituted by the Direct Tax Laws (Amendment) Act, 1987 with effect from 1.4.1989, that is, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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