Law: Income Tax Act, 1961

Section: 3,32,5,5(1)

Income-tax--Depreciation---Previous year---Change in previous year---Computation of depreciation ---Effect of proviso to R.5(1) ---Assessee seeking change in previous year resulting in particular previous year extending to fifteen months ---ITO allowing change subject to condition that claim for depreciation would be restricted for twelve months---Condition was in contravention of R.5(1) and was not valid---Indian Income Tax Act, 1961, Ss.3 & 32---Indian Income Tax Rules, 1962, R. 5. (b) Income-tax--- ----General principles---No estoppel against provisions of statute ---Assessee accepting invalid condition can challenge such condition. (c) Income-tax--- ----Depreciation---Extra-shift allowance--Extra-shift allowance to be granted on basis of double shift or triple shift worked by concern as a whole---Indian Income Tax Act, 1961, S:32---Indian Income Tax Rules, 1962, Appex.I. The assessee would be entitled to extra-shift allowance in respect of plant and machinery on the basis of the double shift or triple shift worked by the concern as a whole, and not with reference to the working of each item of machinery or plant. South India Viscose Ltd. v. CIT (1997) 227 ITR 286 (SC) fol. Under the proviso to rule 5(1) of the Income Tax Rules, 1962, where the assessee was allowed to vary the meaning of the expression, "previous year" in respect of any business or profession, the depreciation to be allowed shall be increased by multiplying the fraction of which the numerator is the number of complete months of the previous year and the denominator is 12. The assessee was closing its accounts on December 31, every year. It desired to change its accounting year so that it would end on March 31. It wrote to the Income-tax Officer on November 20, 1979, requesting permission for the change. If the assessee's request for change of the previous year was accepted, it would result in the previous year for the assessment year 1980-81 extending from January 1, 1979 to March 31, 1980. That meant, the assessee would have a previous year of the duration of 15 months. The Income-tax Officer to guard himself from granting certain additional depreciation, issued a letter, dated November…

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