Revenue tax guidelines | There isn’t a requirement that any explicit methodology of calculating the depreciation declare be chosen earlier than the due date for submitting the return: SC

Revenue tax guidelines |  There isn’t a requirement that any explicit methodology of calculating the depreciation declare be chosen earlier than the due date for submitting the return: SC

The Supreme Court docket noticed that there is no such thing as a requirement underneath the second proviso to Sub-Rule (1A) of Rule 5 of the Revenue Tax Guidelines, 1962 that any explicit methodology of calculating depreciation declare must be chosen earlier than the due date for submitting of the return.

The courtroom added that the one requirement is that the choice should be exercised earlier than submitting the return.

On this context, the Authority stated Justice P.V. Nagarathna And Justice Ujjal Bhuiyan He stated that, ‚ÄúThere isn’t a requirement underneath the second proviso to Sub-Rule (1A) of Rule 5 of the Guidelines that any explicit methodology of calculating depreciation declare must be chosen earlier than the due date for submitting the return. All that’s required is that the assessee should make the selection earlier than or on the submitting of the return. On the time of submitting of the return searching for to avail depreciation contemplated underneath Part 32(1) underneath Sub-Rule (1) of Rule 5 learn with Appendix-I in lieu of depreciation laid out in Appendix-1A by way of Sub-Rule (1A) of Rule 5 achieved by the assessee “

Counselor Rupesh Kumar It appeared for the appellants, whereas Senior Advisor S Ganesh And Senior Advisor Percy Pardiwala Appeared to resident respondent.

On this case, the assessee claimed depreciation of the medium voltage generators on about 8 July 1998, on the fee of 25% on written worth (WDV) foundation. The Assessing Officer, upon assessment, decided that due to adjustments within the legislation referring to depreciation of energy producing unit belongings efficient April 1, 1997, taxpayers ought to take depreciation utilizing the straight-line methodology for belongings acquired on or after that date. The worker famous that the taxpayer didn’t elect to assert depreciation based mostly on WDV and, due to this fact, have been eligible to assert depreciation utilizing the straight-line methodology.

The assessee, in his enchantment to the CIT(A), argued towards the Assessing Officer’s restriction of turbine depreciation to Rs. 1,59,10,047.00 as a substitute of the claimed Rs. 2,85,37,634.00. The CIT(A), in its order dated 16.05.2005, upheld disallowance of depreciation.

The courtroom, based mostly on an earlier choice for the evaluation 12 months 2000-2001, determined in favor of the assessee on enchantment. In subsequent appeals, the Supreme Court docket confirmed the courtroom’s reasoning, stating that the income problem was not a substantive query of legislation.

The Supreme Court docket noticed that there is no such thing as a dispute that the assessee had claimed depreciation as per sub-rule (1) learn with Annexure-I earlier than the due date for submitting the return of revenue. In mild of this, it was determined that, “The view taken by the Assessing Officer as confirmed by the primary appellate authority that the assessee has to go for one of many two strategies will not be a statutory requirement. Subsequently, the Income was not justified in lowering the declare of depreciation of the assessee on the bottom that the assessee didn’t particularly go for the WDV methodology.”

In view of this, the Court docket upheld the view expressed by the Tribunal and the Supreme Court docket.

Trigger Title: Commissioner of Revenue Tax v. M/s Jindal Metal & Energy Restricted 2023 INSC 1053

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    (Tags for translation)Supreme Court docket

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