Law:

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Section 43(6) of the Income-tax Act, 1961 - Written down value - Assessment year 1997-98 - Where Tribunal directed Assessing Officer to allow depreciation on basis of valuation of assets as submitted by assessee holding Explanation 2 to section 43(6) would not apply in case of assessee, it could not be held that there was no finding on merits by Tribunal [In favour of assessee] The assessee-company purchased a textile unit with effect from 18-5-1996. In the return of income originally filed, the assessee claimed depreciation on the written down value of these assets appearing in the tax records of the seller on the date of sale. Vide letter dated 22-9-1998, a revised claim of depreciation was made by the assessee. The said claim was not entertained by the Assessing Officer on the ground that in the absence of any revised return, the claim could not be processed. The Tribunal, vide the impugned order held that the assessee was entitled to the claim of depreciation and directed the Assessing Officer to allow the depreciation on the basis of the valuation of the assets submitted on 22-9-1998. The revenue assailed the impugned order on the ground that no reason was given by Tribunal while allowing claim of assessee. Held that the findings recorded in the order of the Tribunal categorically recorded thatExplanation 2 to section 43(6) would not apply in the case of the assessee. This was preceded by narration of facts and reasons as to why the said Explanation was not applicable. In the circumstances, the submission that there was no finding on the merits by the Tribunal was without any substance. CASES REFERRED TO Goetze (India) Ltd. v. CIT [2006] 284 ITR 323/157 Taxman 1 (SC). Manish R. Bhatt and Mrs. Mauna M. Bhatt for the Appellant. JUDGMENT D. A. Mehta, J. - In this tax appeal under section 260A of the Income-tax Act, 1961 ("the Act"), filed by the Revenue for the assessment year 1997-98, the following question of law stated to be substantial question of law has been proposed : "Whether the Appellate Tribunal is right in law and on the facts in reversing the order passed by the Commissioner of Income-tax (Appeals) directing the Assessing Officer to allow the…

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