Tribunal held that when book value of certain assets undergoes reduction as a result of change in rate of deprecation, such reduction is different from diminution in value of assets and, same is not hit by clause (i) of Explanation 1 to section 115JB. However self serving evaluation of useful life of depreciable assets leading to higher rate of depreciation and consequently resulting reduced tax burden for assessee was not bonafide, same would be a colourable device to evade tax. Matter remanded to the Assessing Officer. (AY.2012-13)
DCIT v. Railtel Corpn. of India Ltd. (2018) 176 ITD 169 (Delhi) (Trib.)
S. 115JB : Book profit–Change in deprecation rate–Reduction due to change in depreciation rate is different from diminution in value of assets and same is not hit by clause (i) of Explanation 1 to section 115JB-Self serving evaluation of useful life of depreciable assets leading to higher rate of depreciation and consequently resulting reduced tax burden for assessee was not bonafide, same would be a colourable device to evade tax- Matter remanded to Assessing Officer for verification. [S. 32]