High Court Of Madras
CIT vs. Aircel Ltd.
Section 32
Asst. Year 2000-01
P.D. Dinakaran & Mrs. Chitra Venkataraman, JJ.
Tax Case (Appeal) No. 241 of 2007
13th March, 2007
Counsel Appeared :
J. Narayanaswamy, for the Appellant
JUDGMENT
P.D. DINAKARAN, J. :
This appeal is directed against the order of the Tribunal, dt. 22nd Sept., 2006 made in ITA No. 955/Mad/2006 for the asst. yr. 2000-01, raising the following substantial questions of law :
“1. Whether in the facts and circumstances of the case, the Tribunal was right in holding that the assessee has an option not to claim depreciation in any particular year ?
Whether in the facts and circumstances of the case, the Supreme Court’s ruling in the case of CIT vs. Mahendra Mills (2000) 159 CTR (SC) 381 : (2003) 243 ITR 56 (SC) would be applicable to the assessment years after the omission of s. 34(1) of the IT Act and r. 5AA of the IT Rules ? and Whether in the facts and circumstances of the case, Expln. 5 to s. 32 of the IT Act should be read to have retrospective operation, since it only explains the law as it stood ?”
2.1 The Revenue is the appellant. The assessee is a company engaged in the business of providing cellular mobile telephony service. For the asst. yr. 2000-01, even though the assessee did not claim depreciation, the AO allowed the depreciation to an extent of Rs. 36,91,12,722, holding that allowing depreciation is mandatory.
2.2 On appeal by the assessee, the CIT(A) allowed the appeal in favour of the assessee and directed the AO not to allow any depreciation for the asst. yr. 2000-01. 2.3
On appeal by the Revenue, the Tribunal following the decision of the apex Court in CIT vs. Mahendra Mills (2000) 159 CTR (SC) 381 : (2003) 243 ITR 56 (SC) held that depreciation cannot be forced upon the assessee and where assessee had not claimed depreciation, the same should not be granted.
3. The learned standing counsel for the Revenue fairly concedes that the issues are squarely covered against the Revenue by the decision of the apex Court in CIT vs. Mahendra Mills (supra), which was followed by this Court in CIT vs. Sree Senhavalli Textiles (P) Ltd. (2003) 183 CTR (Mad) 453 : (2003) 259 ITR 77 (Mad).
4. In CIT vs. Mahendra Mills (supra), the apex Court held that :
“The language of the provisions of ss. 32 and 34 of the IT Act, is specific and admits of no ambiguity. Sec. 32 allows depreciation as deduction subject to the provisions of s. 34. Sec. 34 provides that deduction under s. 32 shall be allowed only if the prescribed particulars have been furnished. Rule 5AA of the IT Rules, since deleted, provided for the particulars required for the purpose of deduction under s. 32. Even in the absence of r. 5AA, the return of income in the form prescribed itself requires particulars to be furnished if the assessee claims depreciation. ……………………………. The provision for claim of depreciation is certainly for the benefit of the assessee. If he does not wish to avail of that benefit for some reason, the benefit cannot be forced upon him.”
The said decision of the apex Court was also followed by this Court in CIT vs. Sree Senhavalli Textiles (P) Ltd.(supra). In view of the law as enunciated from the decisions referred to supra, it is clear that depreciation cannot be forced upon the assessee, when the assessee does not wish to avail of that benefit for some reason, particularly when the provision for claim of depreciation is for the benefit of the assessee. Finding no substantial question of law arising for our consideration, this appeal is dismissed. No costs.
[Citation : 296 ITR 85]
