DABUR INDIA LTD. Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) RAJIV shakdher, J. : This is an appeal under s. 260A of the IT Act, 1961 (hereinafter referred to as the Act) against the judgment dt. 31st 1063/Del/2004.

(2.) BEFORE we consider the submissions made in support of the appeal the following facts require to be noted : processed under s. 143(1)(a) of the Act as the returned income. However, notices were issued under s. 143(2) of the Act. 2.2 In response to the aforesaid notices, hearing was attended by an Authorized Representative before the AO. Details were sought and clarifications were supplied by the assessee. The net result was that with regard to issue, whether in calculating deduction under s. 80 -IB and s. 80HHC the assessee had deducted depreciation from profits and gains derived from such businesses - -it was revealed that the assessee's six (6) industrial units at Baddi, which are eligible for deduction under s. 80 -IB, no depreciation had been provided for in determining profits and gains eligible for deductions under s. 80 -IB while, with regard to all other industrial units of the assessee depreciation had been charged. 2.3 It was also noticed that similarly, in the case of deduction under s. 80HHC deduction had been claimed without deducting depreciation while arriving at eligible profits and gains in terms of the said section. 2.4 The AO after a detailed discussion, and specially, after noticing the judgment of Supreme Court in the case of CIT vs. Mahendra Mills (2000) 159 CTR (SC) 381 : (2000) 243 ITR 56 (SC) came to the conclusion that depreciation is a statutory allowance and even if the assessee has not furnished the particulars, it is open to the AO to grant depreciation. The AO pointedly referred to distinguishing features obtaining in Mahendra Mills (supra) and the present case, inasmuch on the statute book. The AO noticed that with the enactment of Taxation Laws (Amendment and Miscellaneous Mahendra Mills (supra) had no applicability to the present case. 2.5 Accordingly, the AO made the necessary adjustment in profits and gains returned by the assessee by deducting the depreciation in order to arrive at the eligible profits for purpose of deduction under ss. 80 -IB and 80HHC.

(3.) BEING aggrieved, the assessee preferred an appeal to the Commissioner of Income -tax (Appeals) [hereinafter referred deductions under ss. 80 -IB and 80HHC after withdrawing the depreciation quantified at Rs. 11,41,47,451. The CIT(A) based his order on the decision of his predecessors in earlier assessment years i.e. asst. yrs. 1997 -98, 1998 -99 and 1999 -2000.