COMMISSIONER OF INCOME TAX Vs. RHONE POULENC LIMITED

JUDGEMENT

(1.) THIS appeal has been filed against the judgment and order passed by the Tribunal dt. 1st Feb., 1999.

(2.) THE facts giving rise to this appeal, briefly, are as follows : The respondent -company is a pharmaceutical company. It took over the assets of the Indian branch of May and Baker Limited, U.K. on 1st Jan., 1975. In the original returns for the asst. yrs. 1976 -77 and 1977 -78, the respondent did not claim depreciation on the assets of the Indian branch. However, for the asst. year 1978 -79, it claimed depreciation on the original cost of the assets which were taken over by it and this depreciation was claimed on the original cost and not on the written down value. Subsequently, revised returns were filed for the asst. yrs. 1976 -77 and 1977 -78, whereby the respondent claimed depreciation on the original cost of the assets. After filing of the revised returns for the asst. yrs. 1976 -77 and 1977 -78, the U.K. company entered into a settlement with the CBDT on 30th Aug., 1980, which was communicated to the respondent only on 30th Sept., 1983. At this stage, it may be mentioned that before the settlement and even thereafter it was quite debatable as to whether the depreciation was actually allowed to the U.K. company. One of the points also debatable was the applicability of r. 10. However, if one goes into the terms of the settlement, it is clear that finally in order to buy peace an ad hoc figure of underassessment was arrived at and it was accepted by the assessee. On the basis of this ad hoc figure of underassessment the Department now contends that the assessee was guilty of concealment of income.