2002 PLP 1239 (PTD)
COMMISSIONER OF INCOME-TAX Versus RAJAPALAYAM MILLS LTD.
| Citation | 2002 PLP 1239 (PTD) |
| Forum / Court | 241 I T R 492 |
| Bench Members | R. Jayasimha Babu and N. V. Balasubramanian, JJ |
| Parties | COMMISSIONER OF INCOME-TAX Versus RAJAPALAYAM MILLS LTD. |
| Primary Law | Income-tax |
Q1: What are the key laws and sections cited in 2002 PLP 1239 (PTD)?
This judgment primarily cites: Income-tax as referenced in Pakistani case law index.
Q2: Which judicial bench decided the case 2002 PLP 1239 (PTD)?
The case was heard and decided by the 241 I T R 492 bench comprising: R. Jayasimha Babu and N. V. Balasubramanian, JJ.
Q3: What is the official citation format for this judgment on Pakistan Law Portal?
Cite this legal precedent as: 2002 PLP 1239 (PTD) (COMMISSIONER OF INCOME-TAX Versus RAJAPALAYAM MILLS LTD.). Read the full summary and cross-referenced laws free on Pakistan Law Portal.
Laws Cited
Headnotes / Summary
Actual cost
Not liable to be reduced from actual cost of assets for determination of depreciation
Indian Income Tax Act, 1961, S.32. Held, that the assessment orders allowing depreciation on assets without reducing the SIPCOT subsidy from the cost of the assets were not prejudicial to the interests of the Revenue. CIT v. P.J. Chemicals Ltd. (1994) 210 ITR 830 (SC) fol. C.V. Rajan for the Commissioner. P.P.S. Janarthana Raja for the Assessee.
Judgment & Decree
N.V. BALASUBRAMANIAN, J.
Two questions of law arising out of the assessment of the assessee-respondent for the assessment years 1978-79 and 1979-80 have been referred to us at the instance of the Revenue. The questions of law read as under: "(1) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the assessment order for the assessment year 1978-79 allowing depreciation on assets without reducing the SIPCOT subsidy from the cost of the assets are not prejudicial to the interests of the Revenue? (2) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the assessment order for the assessment year 1979-80 allowing depreciation on assets without reducing the SIPCOT subsidy from the cost of the assets are not prejudicial to the interests of Revenue?" Though there are two questions, the issues raised in both the questions are common. The Income-tax Officer originally allowed the depreciation on assets without reducing the amount of subsidy from the SIPCOT from the cost of the assets and completed the assessment for both the assessment years. The Commissioner of Income-tax in exercise of the powers of revision held that the amount of subsidy received by the assessee should be reduced from the actual cost of the machine for determining the depreciation. The Appellate Tribunal held that the Commissioner was not right in his view that the subsidy amount should be reduced from the actual cost of machinery and he has not exercised his powers of revision properly and the order of the Income-tax Officer was not in any way erroneous. The order of the Tribunal is the subject-matter of the tax case reference. After the Tribunal has passed the order, the Supreme Court in the case of CIT v. P.J. Chemicals Ltd. (1994) 210 ITR 830, held that the amount of subsidy received is not liable to be reduced from the actual cost of assets for the purpose of determining the depreciation allowable to the assessee. On the basis of the decision of the Supreme Court, we hold that there is no error in the orders of the Income-tax Officer granting deduction of the SIPCOT subsidy amount from the cost of the assets for the purpose of determining depreciation and hence the Commissioner could not have exercised his powers of revision under section 263 of the Act to cancel the orders of the assessment, as there is no error in the assessment order. The Tribunal has correctly come to the conclusion that the Commissioner of Income-tax, on the facts of the case, had not assumed the jurisdiction properly. Accordingly, both the questions referred to us are required to be and they are answered in the affirmative against the Revenue and in favour of the assessee. The assessee will be entitled to costs in the reference of a sum of Rs.750 (Rupees seven hundred and fifty only) in one set. M.B.A/612/FC Order accordingly.