COMMISSIONER OF INCOME TAX Vs. ABDULKARIM STONE CONTRACTOR

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal, has referred the following question of law arising out of its order dated February 26, 1986, in respect of the assessment years 1982-83 and 1983-84 of Abdul Karim Stone Contractor and for 1982-83 in the case of Raj. Flooring Stone Co. and Agarwal Flooring Stone Co. Kota :

(2.) THE dispute in the present matter relates to the claim for depreciation on dumpers owned by the assessees. THEy derived income from owning of mines, extracting stones and selling them. THE Income-tax Officer treated the dumpers as road vehicles and allowed depreciation at the rate of 40 per cent. THE Commissioner of Income-tax invoked the powers under Section 263 as he was of the opinion that the dumpers are vehicular mechanism specially equipped with a tilting device for unloading. For computing depreciation allowance in case of the assessee, the relevant provision was found under item No. 8 or 9 of Table III of Part I of Appendix-I to the Income-tax Rules and 30 per cent. depreciation was applicable. It was contended by the assessee before the Commissioner of Income-tax that dumpers are used to remove the overburden in the mining area from one point to another and, therefore, they were entitled to initial depreciation and investment allowance under Sections 32(1)(iia) and 32A of the Income-tax Act. THE contention of the assessee was rejected on the ground that such a claim was never made before the Income-tax Officer.

(3.) RELIANCE has also been placed on the case of CIT v. Indian Rare Earth Ltd. [1990] 181 ITR 22 (Bom) [FB], wherein it was observed that the assessing authority has jurisdiction to complete the entire assessment de novo and in reassessment proceedings an assessee is entitled to make a claim for deduction even though such claim was not made during the course of the original assessment proceedings. Items Nos. 8 and 9 of Table III-D of the Appendix I of the Income-tax Rules is as under :