Law:

Section:

Section 32 of the Income-tax Act, 1961 - Depreciation - Allowance/rate of - Assessment year 1988-89 - Tribunal held that assessee which had filed revised return specifically withdrawing claim for depreciation made earlier was not entitled to allowance of depreciation - Explanation 5 was inserted in section 32(1) with effect from 1-4-2002 declaring that provision of sub-section 32(1) would apply, whether or not assessee had claimed depreciation after Supreme Court in CIT v. Mahendra Mills [2000] 243 ITR 56/ 109 Taxman 225 held that if in revised return filed by assessee, assessee had withdrawn claim for depreciation made in original return, then assessment made on revised return without considering depreciation claim would be proper assessment, as privilege of claiming depreciation cannot be converted into disadvantage and option cannot become obligation - Whether interpretation of relevant provision of the Act by Supreme Court settles law and unless subsequent amendment is expressly given retrospection effect, law laid down by Supreme Court would remain binding for period prior to amendment and, hence, Tribunal was right in holding that depreciation was not required to be allowed, as same had not been claimed - Held, yes CASE REFERRED TO CIT v. Mahendra Mills [2000] 243 ITR 56/ 109 Taxman 225 (SC). J. Naresh Kumar for the Appellant. JUDGMENT R. Jayasimha Babu, J. - The question referred to us at the instance of the revenue is, "Whether, on the facts and in the circumstances of the case, the Tribunal is correct in law in upholding the order of the Commissioner (Appeals) holding that the depreciation should not be allowed to the assessee since he has specifically withdrawn the claim for depreciation by filing revised return?" 2. The assessment year is 1988-89. The Supreme Court in the case of CIT v. Mahendra Mills [2000] 243 ITR 561 , has held that if the revised return filed by the assessee is a valid return and the assessee has withdrawn the claim for depreciation that it had made in the original return, then the assessment based on the revised return without considering the claim for depreciation would be a…

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