DASAPRAKASH BOTTLING CO Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE following question has been referred at the instance of the assessee under Section 256(1) of the I.T. Act, 1961.

(2.) THE ITO issued a notice calling upon the assessee to give specific reasons in writing as to why depreciation was not claimed and why the prescribed particulars were not furnished. THE notice stated also that if the assessee failed to furnish the required information, there would be an ex parte assessment. In response to this notice and to avoid any ex parte assessment and penalty proceedings, the assessee furnished particulars relating to depreciation under protest. In the letter dated 29th March, 1971, in furnishing these particulars, the assessee stated that the depreciation allowable under the Act has not been claimed inasmuch as it felt that it was not necessary having regard to the facts and circumstances of the case, and that in view of the above decision not to claim depreciation, the particulars normally required to be furnished for substantiating the claim for depreciation allowance were not given. THE ITO allowed a depreciation of Rs. 1,27,589 and taxed the assessee on the balance of Rs. 65,491, As the firm is registered, only the registered firm's tax was demanded from the firm.

(3.) IN Ascharajlal Ram Parkash v. CIT, 1973 90 ITR 477 , the ITO allowed depreciation on a truck purchased by the assessee and used for his business. The assessee contended before the AAC that, as he had not furnished the prescribed particulars in the return for allowance of depreciation, the ITO should not have allowed depreciation. This plea was rejected by the AAC and also by the Appellate Tribunal on further appeal. The Allahabad High Court considered the legality of the allowance and pointed out at page 478 :