COMMISSIONER OF INCOME TAX vs. DEEPAK NITRITE LTD.

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ITR/137/1996HC GujaratGJHC24021817199607 March 2001Author: HONOURABLE MR. JUSTICE J.M.PANCHAL,HONOURABLE MR. JUSTICE MOHIT S. SHAH2 pages

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What did the High Court hold?

The High Court held that the Tribunal was correct in its decision. The reasoning provided is that the controversy is concluded by the Supreme Court's judgment in the case of Commissioner of Income Tax Vs. Deepak Nitrite Ltd., reported in (2000) 243 ITR 825. Therefore, the assessee is entitled to the grant of depreciation on the factory building and office building of the Pune unit, even though the conveyance deed was not registered in its favour by the end of the relevant accounting year. The ratio decidendi is that the Supreme Court's decision on this specific issue for the same assessee is binding. The reference is answered in the affirmative, in favour of the assessee and against the Revenue. No issue was expressly left undecided.

What were the facts?

The Commissioner of Income Tax (Revenue) has filed a reference before the High Court of Gujarat at Ahmedabad concerning Assessment Year 1986-87. The reference arises from an order of the Income Tax Appellate Tribunal, Ahmedabad Bench "B". The core issue pertains to the assessee, Deepak Nitrite Ltd., claiming depreciation on factory and office buildings at its Pune unit. The conveyance deeds for these properties were not registered in favour of the assessee by the end of the relevant accounting year. The Revenue is challenging the Tribunal's decision to allow depreciation in such circumstances.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal is right in holding that the assessee is entitled to grant of depreciation on factory building and office building of Pune unit though the conveyance deed in respect of these properties was not registered in favour of the assessee till the end of the accounting year relevant to the previous year under consideration? Assessee's Contention: Not recorded in the judgment. Revenue's Contention: The Revenue, through its learned counsel, fairly stated that the controversy is concluded by the Supreme Court's decision in the case of Commissioner of Income Tax Vs. Deepak Nitrite Ltd., reported in (2000) 243 ITR 825. This implies the Revenue's argument would align with the Supreme Court's ruling, likely challenging the entitlement to depreciation without registered conveyance deeds.

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX REFERENCE No 137 of 1996

For Approval and Signature:

Hon'ble MR.JUSTICE J.M.PANCHAL and Hon'ble MR.JUSTICE M.S.SHAH

============================================================ 1. Whether Reporters of Local Papers may be allowed : NO to see the judgements?

To be referred to the Reporter or not? : NO 3. Whether Their Lordships wish to see the fair copy : NO of the judgement?

Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder?

Whether it is to be circulated to the Civil Judge? : NO -------------------------------------------------------------- COMMISSIONER OF INCOME TAX Versus DEEPAK NITRITE LTD. -------------------------------------------------------------- Appearance: MR MANISH R BHATT for Petitioner

--------------------------------------------------------------

CORAM : MR.JUSTICE J.M.PANCHAL and MR.JUSTICE M.S.SHAH

Date of decision: 07/03/2001

ORAL JUDGEMENT (Per : MR.JUSTICE J.M.PANCHAL)

At the instance of Revenue, the Income Tax Appellate Tribunal, Ahmedabad Bench "B" has referred following question of law for the opinion of this Court relating to Assessment Year 1986-87:-

"Whether, on the facts and in the circumstances of the case, the Tribunal is right in holding that the assessee is entitled to grant of depreciation on factory building and office building of Pune unit though the conveyance deed in respect of these properties was not registered in favour of the assessee till the end of the accounting year relevant to the previous year under consideration?"

We have heard the learned Counsel for the Revenue. Though served, no one appears on behalf of the respondent. The learned Counsel for the Revenue fairly states at the bar that the controversy raised in the present reference is concluded by the decision of the Supreme Court rendered in the case of the very assessee - Commissioner of Income Tax Vs. Deepak Nitrite Ltd., reported in (2000) 243 ITR 825. In view of the aforesaid decision, we are of the opinion that the Tribunal is right in holding that the assessee is entitled to grant of depreciation on factory building and office building of Pune unit though the conveyance deed in respect of these properties was not registered in favour of the assessee till the end of the accounting year relevant to the previous year under consideration. The reference is therefore answered in the affirmative i.e. in favour of the assessee and against the Revenue. The reference stands disposed of accordingly with no order as to costs. ---

*/Mohandas

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