C I T Vs. JAYANT EXTRACTION INDUSTRIES

JUDGEMENT

(1.) PRESENT Income Tax Reference at the instance of the Revenue is made by the learned Income Tax Appellate Tribunal Rajkot Bench, Rajkot to consider the following questions of law arising out of the Tribunal's common order dated 24.2.1997 passed in ITA Nos.5177, 5487 and 5488/AHD/1988 for the opinion of this Court.

(2.) THE facts in R.A. No.248/AHD/1997 are that before the Inspecting Assistant Commissioner (Assessment) who was the Assessing Officer, the assessee claimed for allowance of depreciation on the basis of revalued cost of assets as per the dissolution deed. According to the assessee, it had revalued its assets upward by Rs. 25 lacs out of which Rs.22 lacs were taken to the reserve account for meeting the tax liability and the balance amount was distributed amongst all the 18 partners who were partners during the first period. The A.O rejected the claim of the assessee for extra shift allowance on the same basis.

(3.) SHRI Pranav G.Desai, learned advocate for the Revenue has submitted that the learned Tribunal has materially erred in directing the AO to allow depreciation of enhanced value to the successor firm and in holding that the extra shift allowance, if allowable should be based on the value adopted by the successor firm and not the written down value without deciding the said issue on merits and solely by observing that it was not clear from the assessment order that the Assessing Officer had obtained approval of Dy. Commissioner before applying the Explanation 3 of Section 43(1). It is submitted that as such the issue was with respect to AY 198182 and as per the law prevailing prior to 1.4.1988 in Explanation 3 of Section 43(1) the approval of the Inspecting Assistant Commissioner was required to be obtained, which subsequently came to be substituted to Deputy Commissioner. It is submitted that in the present case and at the relevant time the AO himself was Inspecting Assistant Commissioner also and therefore, he himself was Inspecting Assistant Commissioner there was no question of any approval of himself. It is submitted that the aforesaid has not been considered by the learned Tribunal at all and without considering the aforesaid depreciation claim on merits, has decided the issue against the revenue. Therefore, it is requested to remand the matter to the learned Tribunal to consider the aforesaid issue/ question afresh and on merits.