Facts

The assessee claimed a certain amount as depreciation. The AO allowed the claim   in part and disallowed the balance depreciation. On appeal, the Tribunal held that the assessee was not entitled to depreciation at all. Therefore, the entire claim was directed to be disallowed.

Issue

Can the Tribunal take back a benefit conferred by the AO or enhance the assessment?

Views

The assessee relied on the Supreme Court’s judgment in the case of Hukumchand Mills Ltd. v. CIT (1967) 63 ITR 232 (SC) to argue that the Tribunal  does  not have the power to enhance an assessment. The department supported the order of the Tribunal.

Held

The Supreme Court accepted the assessee’s contention and held that the Tribunal has no power to take back a benefit conferred by the AO,  i.e., the Tribunal  does not have the power of enhancement. (AY. 1991-92) (CA  No.  955  of  2009 dt. 12-2-2009)

Editorial : Similar view has been taken in the case of State of Kerala v. Vijaya Stores (1979) 116 ITR 15 (SC). However, the Karnataka High Court in the case of Fidelity Business Services India P. Ltd. v. ACIT (2018) 257 Taxman 266 (Karn) (HC) has taken a contrary view.

“If we could change ourselves, the tendencies in  the world would also change. As a man changes his own nature, so does the attitude of the world change towards him.”

– Mahatma Gandhi