CIT Vs. FUNSKOOL (INDIA) LTD

JUDGEMENT

(1.) THE above tax case appeal is directed against the order of the Income Tax Appellate Tribunal in I. T. A. No. 913/Mds/94 dated 17 -3 -2003, raising the following substantial questions of law: (a) Whether, on the facts and circumstances of the case, the Tribunal was right in holding that investment allowance/depreciation can be allowed on the additional customs duty paid during the year in respect of machinery imported and installed in an earlier year ? (b) Whether, on the facts and circumstances of the case, the Tribunal was right in holding that investment allowance/depreciation not claimed when the return was filed or even during the assessment proceedings ought to be allowed ?

(2.) THE assessee -company filed its return of income admitting a net loss of Rs. 1.36 crores. After making various additions, the loss was brought down to Rs. 1.06 crores.

(3.) ENRAGED by the order of the Commissioner, the assessee preferred an appeal before the Income Tax Appellate Tribunal claiming investment allowance and depreciation allowance on 'the ground that the payment of additional customs duty in respect of goods imported earlier ought to be added to the value of the goods. The Tribunal allowed the claim of the assessee towards investment and depreciation allowance holding that the payment of additional customs duty had to be added to the cost of machinery imported. Hence the appeal by the revenue.