Law:

Section:

Section 32 of the Income-tax Act, 1961, read with sub-entry (ii)B(7) of entry III of Part I of Appendix I to the Income-tax Rules, 1962 [omitted by the Income-tax (Fourth Amendment) Rules, 1983 with effect from 2-4-1983] - Depreciation - Allowance/rate of - Whether words 'corrosive chemicals' employed in sub-entry (ii)B(7) of entry III of Part I of Appendix I to the Income-tax Rules, 1962 contemplated only free chemicals and not non-free chemicals of corrosive effect - Held, yes Section 246 of the Income-tax Act, 1961 - Appellate Assistant Commissioner/Commissioner (Appeals) - Appealable orders - Whether it is open to an assessee to dispute levy of interest in appeal, provided he limited himself to ground that he is not liable to levy at all - Held, yes FACTS The assessee carried on the business of manufacture of machinery for sugar mills, cement factories, etc., besides the manufacture of sugar. The Tribunal held that the words 'corrosive chemicals' employed in sub-entry (ii)B(7) of entry III of Part I of Appendix I to the Income-tax Rules, 1962, contemplated not only free chemicals but also non-free chemicals of corrosive effect. It further held that the assessee could agitate in its quantum appeal the question of chargeability of interest under section 139(8). On reference by the revenue : HELD Following the decision of the Punjab and Haryana High Court in the case of the same assessee reported as CIT v. Saraswati Industrial Syndicate Ltd. [1982] 136 ITR 758, it was held that the words 'corrosive chemicals' employed in sub-entry (ii)B(7)of entry III of Part I of Appendix I to the Income-tax Rules, 1962 contemplated only free chemicals and not non-free chemicals of corrosive effect. It has been held by the Supreme Court in Central Provinces Manganese Ore Co. Ltd. v. CIT [1986] 160 ITR 961 that the levy of interest is a part of the process of assessment and it is, therefore, open to an assessee to dispute the levy of interest in appeal, provided he limited himself to the ground that he is not liable to the levy at all, but if the assessee does not dispute the amount of advance tax determined as payable by the ITO, he cannot object merely to the levy of penal…

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