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Ascharajlal Ram Parkash Vs. Commissioner of Income-tax - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtAllahabad High Court
Decided On
Case NumberIncome-tax Reference No. 543 of 1969
Judge
Reported in[1973]90ITR477(All)
ActsIncome Tax Act, 1961 - Sections 32 and 34; Income Tax Rules, 1962 - Rule 12
AppellantAscharajlal Ram Parkash
RespondentCommissioner of Income-tax
Appellant AdvocateS.S. Bhatnagar, Adv.
Respondent AdvocateR.R. Misra, Adv.
Excerpt:
- - we are not satisfied that merely because the assessee did not file the necessary particulars in the return filed by him, the income-tax officer did not have the jurisdiction to grant the allowance by way of depreciation......of an unregistered firm for the assessment year 1961-62. in the assessment order the income-tax officer allowed depreciation on a truck purchased by the assessee for the purpose of its business. the depreciation allowed amounted to rs. 3,000. an appeal was filed by the assessee before the appellate assistant commissioner, and one of the grounds was that as the assessee did not furnish the particulars in its return necessary for allowing depreciation, the income-tax officer should not have allowed it any amount by way of depreciation. the appellate assistant commissioner rejected the plea and dismissed the appeal. a second appeal was filed by the assessee before the income-tax appellate tribunal and the tribunal also rejected the plea that depreciation should not have been allowed. it.....
Judgment:

1. The assessee was assessed in the status of an unregistered firm for the assessment year 1961-62. In the assessment order the Income-tax Officer allowed depreciation on a truck purchased by the assessee for the purpose of its business. The depreciation allowed amounted to Rs. 3,000. An appeal was filed by the assessee before the Appellate Assistant Commissioner, and one of the grounds was that as the assessee did not furnish the particulars in its return necessary for allowing depreciation, the Income-tax Officer should not have allowed it any amount by way of depreciation. The Appellate Assistant Commissioner rejected the plea and dismissed the appeal. A second appeal was filed by the assessee before the Income-tax Appellate Tribunal and the Tribunal also rejected the plea that depreciation should not have been allowed. It seems that the assessee took this plea because the truck was sold by it for Rs. 10,000 in October, 1963, and the difference between the original cost and the written down value apparently arose for consideration under Section 10(2)(vii) for the year 1964-65. At the instance of the assessee, the Tribunal has referred the following question :

' Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the Income-tax Officer wasjustified in allowing depreciation on the truck even though the particulars of the truck were not furnished by the assessee in Part V of the return of income but were furnished in the course of assessment proceedings before the Income-tax Officer '

2. The assessment proceedings for the assessment year 1961-62 were commenced by notice under Section 147 of the Income-tax Act, 1961, and the assessment itself was concluded under Section 143(3) read with Section 147 of the Act. The contention on behalf of the assessee is that unless the assessee complies with the statutory requirement that particulars should be furnished in the return in respect of depreciation, the Income-tax Officer has no jurisdiction to allow depreciation and inasmuch as these particulars were not furnished the allowance of depreciation by the Income-tax Officer could not be maintained.

3. Section 32 of the Act provides that depreciation in respect of buildings, machinery, plant and furniture owned by the assessee and used for the purpose of his business or profession shall be allowed subject to the provisions of Section 34. Section 34 provides that deductions under Section 32 on account of depreciation shall be allowed only if the prescribed particulars have been furnished. In what form the prescribed particulars must be furnished, or in what document, is not mentioned in Section 34. There is no requirement in that section that the prescribed particulars must be furnished in any particular document. Rule 12 of the Income-tax Rules provides for the form in which the return of income must be furnished. In the form of return there is a section which refers to the various particulars required under Section 34(1) when a claim is made for depreciation. Now, merely because the form of the return provides for a place where the statement of such particulars should be set out does not mean that in the absence of such statement the Income-tax Officer has no power to allow the depreciation. A deduction by way of depreciation is necessary in order to arrive at the true profits or gains of the business or profession. The Income-tax Officer is bound to arrive at the true figure of such profits and gains and if in the course of assessment proceedings he comes to know of the relevant particulars necessary for the grant of deduction, he is bound to give effect to it. There is no dispute that during the course of the assessment proceedings in this case the Income-tax Officer did come to know the date on which the truck was purchased, and the original cost of the truck, and from that along with the rate prescribed by the rules for allowing depreciation, he could have computed and allowed depreciation. We are not satisfied that merely because the assessee did not file the necessary particulars in the return filed by him, the Income-tax Officer did not have the jurisdiction to grant the allowance by way of depreciation.

4. Accordingly, we answer the question referred in the affirmative. The Commissioner of Income-tax is entitled to his costs which we assess at Rs. 200. Counsel's fee is assessed at the same figure.


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