INCOME TAX ACT, 1961

Section 32

Depreciation - Higher depreciation under section 32 - Vehicles used in the business of hire -

A search under section 132 was conducted on the premises of assessee and an order under section 143(3) read with section 153A was passed. Thereafter, PCIT invoked powers under section 263 and by an order held that order of assessment passed under section 143(3) read with section 153A was erroneous and was prejudice to the interest of the revenue. PCIT directed AO to pass fresh orders with regard to the claim of the assessee for depreciation to the extent of 30% on lorries, tippers, loaders, etc. AO thereafter passed a consequential Order under section 143(3) by which the claim of the assessee for depreciation was negatived. Held: Supreme Court in 'Radhasoami Satsang v. Commissioner of Income Tax' (1992) 60 Taxman 248 (SC) : 1992 TaxPub(DT) 0858 (SC) had held that even though principles of res judicata did not apply to income tax proceedings, but where a fundamental aspect permeating through the different assessment years was found as the fact one way or the other and the parties have allowed the position to be sustained by not challenging the order, it would not be at all appropriate to allow the position to be changed in subsequent year. Since assessee was found to be using the vehicles and machineries in the business of hire and was entitled for higher rate of depreciation.

Followed:Radhasoami Satsang v. CIT (1992) 60 Taxman 248 (SC) : 1992 TaxPub(DT) 0858 (SC)

REFERRED : Relied:CIT v. M/s. SC. Thakur & Bros. (2010) 322 ITR 463 (Bom) : 2010 TaxPub(DT) 0319 (Bom-HC), CIT v. Lake Palace Hotels & Motels (P.) Ltd. (2006) 286 ITR 589 (Raj) : 2006 TaxPub(DT) 0603 (Raj-HC), CIT v. AM Constructions (1999) 238 ITR 775 (AP) : 1999 TaxPub(DT) 0807 (AP-HC) and Dy. CIT v. Suthanther Assumtha (2016) 75 taxmann.com 67 (Chen-Trib) : 2016 TaxPub(DT) 4535 (Chen-Trib)

FAVOUR : In assessee's favour

A.Y. : 2006-07

SUBSCRIBE FOR FULL CONTENT