Law:

Section:

Section 32 of the I ncome-tax Act, 1961, read with rule 5 and part I of Appendix of the Income-tax Rules, 1962 - D epreciation -Allowance/rate of - Assessment year 1970-71 - Whether where it was established that salt pans, etc., in question were made of earth and clay, assessee was entitled to claim 100 per cent depreciation thereon, irrespective of fact that those salt pans were new or old - Held, yes Facts For the assessment year 1970-71, the assessee-company had claimed depreciation at the rate of 100 per cent on salt pans, etc., under the amended rules which came into force with effect from 1-4-1970, on the ground that said pans were made of earth and clay. The assessee's claim was accepted and the assessment was completed. Later on the ITO reopened the assessment and the said depreciation allowed was withdrawn for the reason that the rate of 100 per cent was admissible only on new pans and not on replacement of old pans. On appeal, the Tribunal, however, accepted the claim of the assessee. On reference: Held It was very clear from the order of the ITO that he refused to allow the assessee's claim for 100 per cent depreciation [solely on the ground that salt pans, etc., were not new. It was, therefore, conclusively established that the ITO had, accepted the assessee's statement that pans, etc., were made of earth and clay. Once this conclusion was reached, it was not disputed that 100 per cent depreciation was admissible irrespective of fact whether salt pans, etc., in respect of which depreciation was claimed were new or old. Accordingly, the Tribunal was justified in accepting the assessee's claim. S.N. Shelat for the Applicant. H.M. Talati for the Respondent. JUDGMENT Mankad, J. - The assessee is a private limited company and we are concerned with the assessment year 1970-71, previous year being the year ended on 30-6-1969. The original assessment in the case of the assesses was completed on 28-2-1973 on nil income. Subsequently, in consequence of information in the possession of the ITO, the completed assessment was reopened under section 147(b) of the Income-tax Act, 1961 ('the Act'). In the course of original assessment proceedings, the assessee had…

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