THE AMARAVATI ZILLA PARISHAD TECHERS CO-OPRATIVE BANK LTD,,NAGPUR vs. INCOME TAX OFFICER ,WARD -4, AMARAVATI

Multiple grounds were raised by the assessee against the single issue of disallowance of depreciation Rs.80,00,000/- on the valuation of Government Securities. The appeal was heard by the Division Bench on 25-04-2016. The Accountant Member did not concur with the view of Judicial Member. Consequently, dissenting orders were passed by both the Members. The matter was referred to Third Member. The then President, Income Tax Appellate Tribunal as Third Member vide order dated 21-09-2016 did not approve the findings of either of the Members and directed that the case deserves to be heard afresh. Thereafter, with the directions of the then President dated 12-03-2018 three Member Bench was constituted to answer the following question in the case : “Whether on facts and circumstances o the case the issue needs to be remitted to the file of the AO in view of the observations made in the order proposed by the Judicial Member or the order of the learned CIT(Appeals) needs to be set aside and the issue to be decided in favour of the assessee as proposed by Accountant Member, allowing the assessee’s claim of depreciation of Rs.80,00,000/- (Rupees Eighty Lacs) in the valuation of Government Security.”

The three Member Bench after hearing the submissions of both the sides decided the issue concurring with the view of Accountant Member in allowing assessee’s claim of depreciation on Government Securities. The relevant extract of the order by three Member Bench on the issue is as under: “17. Thus, in view of the aforesaid, we agree with the decision of the Hon’ble Accountant Member in allowing assessee’s claim of depreciation. The question referred by the Hon’ble President is answered accordingly by holding that assessee’s claim of depreciation of Rs.80 lakh has to be allowed and the order of the learned Commissioner (Appeals) has to be set aside. The Registry is directed to place the appeal records before the concerned Division Bench for deciding as per the majority view.”

Thus, the aforesaid question was answered in favour of the assessee, allowing assessee’s claim of depreciation of Rs.80,00,000/-. Consequently, the impugned order passed by Commissioner of Income Tax (Appeals) is set aside and the appeal of assessee is allowed.

In the result, the appeal of assessee is allowed.