Law:

Section:

Section 32, read with section 254, of the Income-tax Act, 1961 - Depreciation - Allowance/Rate of - Assessment year 1991-92 - Assessee was engaged in leasing business - During relevant assessment year, it purchased 5,46,000 soft drink bottles and directly supplied them to lessee under a lease agreement - Assessing Officer restricted assessee's claim of depreciation in respect of said bottles to 42,000 bottles only on ground that till end of financial year only 42,000 bottles were received by lessee and remaining bottles were received after 31-3-1991 - On appeal, Commissioner (Appeals), after formulating 'User test', remanded matter to Assessing Officer, who on remand held that all 5,46,000 bottles stood dispatched before 31-3-1991 and, therefore, assessee was entitled to 100 per cent depreciation on all 5,46,000 bottles - Said finding of Assessing Officer had not been challenged by revenue authorities - However, in meanwhile Tribunal, while deciding revenue's appeal against order of Commissioner (Appeals), held that transaction in question was only a financial arrangement and not a lease and, therefore, depreciation claim of assessee could not be allowed - Whether when Assessing Officer in original assessment order had granted depreciation in respect of 42,000 bottles, Tribunal could take back said benefit - Held, no - Whether further when on remand Assessing Officer had come to conclusion that all bottles stood dispatched before 31-3-1991 and that finding of fact had become final, Tribunal had erred in disallowing depreciation claimed by assessee - Held, yes Section 254 of the Income-tax Act, 1961 - Appellate Tribunal - Powers of - Whether Tribunal can take back benefit granted to assessee by Assessing Officer - Held, no Section 32 of the Income-tax Act, 1961 - Depreciation - Allowance/Rate of - Assessment year 1991-92 - Assessee was engaged in leasing business - On 15-3-1991, a lease deed was executed between assessee as lessor and one A as lessee in respect of leasing out of certain bottles by assessee to A - There was also a sub-lease deed dated 8-3-1991 between A and one U in respect of said bottles - Assessee claimed depreciation on value of said bottles…

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