This is an appeal filed by the Revenue against the order dt. 20th Oct., 2000 of CIT(A)-I, New Delhi pertaining to 1994-95 assessment year.
1(i) On the facts and circumstances of the case, the learned CIT(A) erred in allowing depreciation @ 40 per cent on leased trucks against 20 per cent allowed by the AO. 1(ii) On the facts and circumstances of the case, the learned CIT(A) ought to have appreciated that in the return of income the assessee had claimed depreciation @ 20 per cent and during the course of assessment proceedings a letter was filed claiming depreciation @ 40 per cent and such letter was filed beyond the period stipulated in Section 139(5).
2. Right at the outset, it was submitted by the learned Authorised Representative of the assessee that the point at issue is covered in assessee's favour by virtue of the judgment of the Delhi High Court in the case of CIT v. Bansal Credits Ltd. and Ors. (2003) 179 CTR (Del) 23 : (2003) 259 ITR 69 (Del) and the orders dt. 27th Feb., 2003 of the Tribunal in assessee's own case for 1985-86 assessment year in ITA No.3866/Del/1998 and 16th Dec., 2003 for 1996-97 assessment year in ITA No. 603/Del/1998 wherein depreciation at the rate of 40 per cent had been allowed to the assessee.
3. The learned Departmental Representative confronted with the orders of the Tribunal and the decision of the jurisdictional High Court, on the other hand, contended that had the case been so simple, he would have fairly conceded that the point at issue is covered. However, the facts available on record are a little different. Referring to the assessment order, it was pointed out that the assessee filed its return declaring an income of Rs. 69,77,600 which was filed on 20th Nov., 1994. Referring to p. 2 of the assessment order, it was submitted that during the course of assessment proceedings, the assessee filed a letter dt. 23rd Oct., 1996 revising its return of income for the year under consideration. Vis-a-vis the depreciation claimed by the assessee, it was pointed out that the assessee stated as under: In the original return depreciation on trucks run on hire was inadvertently claimed @ 20 per cent. As per Appendix I of the IT Rules, 1962, rate of depreciation on trucks run on hire is allowable @ 40 per cent per annum. The claim of total depreciation Under Section 32 is now revised to Rs. 13,43,748 as against Rs. 10,28,368.68 claimed in the original return.
4. Referring to Section 139(5) of the IT Act, it was pointed out that the claim of the assessee was turned down by the AO observing as under: Since, revision of return in the instant case is not in accordance with the provisions of Section 139(5) in view of the facts that the assessee company filed its claim for revision of return vide letter No. 23rd Oct., 1996 (received in this office on 30th Oct., 1996) which is beyond the time limit, the same cannot be entertained and the same is treated as non est.
5. It was further pointed out by him that at p. 3, the AO discussed the claim of the assessee in the following terms and discussed the issue as under: The assessee company is engaged in providing finance to various persons as well as to various dealers of M/s Hero Honda Motor Cycles. During the year under consideration the assessee company has shown lease rental amounting to Rs. 8,41,207 and finance charges earned amounting to Rs. 90,05,338. The details with regard to the lease rental earned and major expenses are obtained and placed on record after verification. The books of account were produced and test checked. As far as assessee's claim of depreciation at higher rate is concerned, the same is disallowed following the judgment of CIT v. Manjeet Stone Co. and CIT v. Sardar Stones (1995) 125 CTR (Raj) 197 : (1995) 215 ITR 350 (Raj). This view is further supported by the Board's Circular No. 652, dt. 14th June, 1993 wherein the Board has clearly specified that higher rate of depreciation is not available to the assessee other than the one who are running the vehicles on hire basis. With these remarks, total income is computed as under: Referring to the impugned order, it was stated that the learned CIT(A) while disposing the appeal of the assessee without touching the specific reason given by the AO for negating the assessee's claim proceeded to dispose the appeal in a cursory manner relying upon the past history and the provisions of the Act. With regard to the specific observation that the claim was made by way of a letter and not by way of revising the return and that too after a lapse of over two years which was not in conformity with Section 139(5) of the Act has not been addressed by him. It was vehemently contended by him that no proper claim was filed by the assessee and in these circumstances, in the absence of a proper claim by way of a revised return, the AO cannot consider the issue of higher depreciation and the CIT(A) has not dealt with this aspect at all. Reliance was placed upon Beco Engineering Co.
Ltd. v. CIT for the proposition that depreciation neither sought nor claimed by the assessee in these circumstances, the AO was not required to allow depreciation. Reliance was also placed upon CIT v. Sree Senhavalli Textiles (P) Ltd. for the proposition that Expln. 5 to Section 32(1) applies only from 1st April, 2002 and the amendment does not apply to earlier years. Their Lordships therein while dealing with the issue of revised return filed by the assessee proceeded to hold as under: Held, affirming the decision of the Tribunal, that the Supreme Court in CIT v. Mahendra Mills (2000) 159 CTR (SC) 381 : (2000) 243 ITR 56 (SC) held that if, in the revised return filed by the assessee, the assessee had withdrawn the claim for depreciation made in the original return, then the assessment based on the revised return without considering the claim for depreciation would be a proper assessment, as the privilege of claiming depreciation could not be converted into a disadvantage and the option could not become an obligation. Though after that judgment Expln. 5 was inserted in Section 32(1) of the IT Act, 1961, declaring that 'for the removal of doubts' the provisions of Sub-section (1) would apply whether or not the assessee had claimed depreciation, the Explanation could not be regarded as taking away the effect of the judgment of the Supreme Court for years prior to the date of coming into force of the Explanation, as the law declared by the Supreme Court could not be regarded as having merely raised doubts. The newly added Expln. 5 took effect only on and from 1st April, 2002, and would not be applicable for prior years.CIT v. Mahendra Mills and Ors. (2000) 159 CTR (SC) 381 : (2000) 243 ITR 56 (SC).
6. The learned Authorised Representative on the other hand contended that in the original return, the assessee had claimed 20 per cent depreciation. Inviting attention to Expln. 5 introduced by Finance Act, 2001 to Section 32 of the IT Act which came into effect from 1st April, 2002, it...was stated that by virtue of the Explanation, the AO was duty bound to consider the claim of the assessee and the said Explanation was said to be declaratory of the position as it always stood. It was further contended that in the course of the assessment proceedings, the AO while adjudicating upon the claim of the assessee has the powers in enhancing the claim and since the assessment proceedings are still open, a claim which has already been made by the assessee and the particulars are already on the file, there is no reason or basis for him not to consider higher depreciation. It was further stated that it was the duty of the AO to give the correct deduction.
7. Having heard the rival submissions and perused the material available on record, it is necessary first and foremost to refer to the paper book filed by the assessee. A perusal of the same shows that from pp. 1 to 8, the submissions made before the CIT(A) are appended which deal with the issue of allowing higher depreciation only. However, the specific reason given by the AO for disallowing the claim has not been referred to. The AO has specifically rejected the claim of the assessee made by way of a letter in the course of the assessment proceedings which contravened Section 139(5) of the IT Act. This fact has not been addressed by the assessee in the written submissions filed before the CIT(A). A perusal of pp. 9 to 10 which contain the order of the Tribunal for 1985-86 assessment year shows that the only issue considered by the Tribunal was the claim of higher depreciation. Page 11 is the assessment order for 2001-02 which again shows that the claim of higher depreciation was allowed by the AO. Similarly, p. 11A and B of the paper book contains the order of the Tribunal for 1996-97 assessment year wherein again the sole issue dealt with is the claim of higher depreciation. Page 12 contains the judgment of the Delhi High Court in the case of CIT v. Suidu Trade Links Ltd. (2004) 189 CTR (Del) 41 wherein the judgment of the Delhi High Court in the case of Bansal Credits Ltd. (supra) had been followed. Page 13 of the paper book contains the details of additions to trucks stated to be leased to transporters in the year under consideration and pp. 14 to 33 is the vehicle lease agreement appended by way of an illustration entered into between the assessee and Arvind Road Carriers. Pages 34 to 39 is the copy of registration certificates of the trucks allegedly leased out and pp. 40 to 41 is the copy of the balance sheet and pre-operative expenses schedule for the year ending 31st March, 1994 in the case of Arvind Road Carriers (P) Ltd. etc. It is seen that as per the certificate appended by the assessee that it is stated as under: This is to certify that all the documents in the paper book have been drawn from the records of the lower authorities and no new evidence is being adduced at this stage.
8. However, as to which document was specifically before the AO or the CIT(A) in the present proceedings, it is seen has not been clarified.
Accordingly, in the circumstances, it seen that whereas the claim of the assessee was rejected by the AO for specific reasons without presumably actually examining the documents available on record, however, the CIT(A) it is seen proceeds to decide the issue on the basis of finding in the first appellate order for 1996-97 assessment year in assessee's own case and the order of the Delhi Bench in the cases of Oriental Leasing Co. v. Dy. CIT, dt. 6th Nov., 1992 [reported at -- Ed.] and Pariwar Finance & Investment Ltd. in ITA No. 1460/Del/1995, dt. 23rd Sept., 1997. Thus, the specific facts have not been addressed by him in the case of the assessee and the specific reason given by the AO has also been left unaddressed.
Accordingly, in these circumstances, we are of the view that it would be appropriate in the circumstances to restore the issue back to the file of the CIT(A) with the direction to specifically address the various documents placed by the assessee and the specific reason brought out by the AO for disallowing the claim of the assessee. From a perusal of the certificate appended by the assessee in its paper book, we are unable to state as to which document was placed before which authority. Without going into the technicalities of this, we would merely direct the learned CIT(A) to decide the appeal by way of a speaking order in accordance with law after giving the assessee an opportunity of being heard.
9. Before parting, we would like to state that as far as the issue pertaining to claim of higher depreciation is concerned, the matter is well-settled by the decision of the jurisdictional High Court in the case of Bansal Credits Ltd. (supra) inasmuch as in case an assessee has leased out its commercial vehicles and the lessee too has put these vehicles for use for the purpose of hiring, then, the claim of the assessee who continues to remain the owner of the assets for higher depreciation has to be allowed. However, on account of the peculiar facts and circumstances of the case, which need to be addressed, the issue for the reasons given hereinabove is restored with the above direction. The ground raised by the Revenue is allowed for statistical purposes.
In the result, the appeal filed by the Revenue is allowed for statistical purposes.
10. In the proposed order sent on 17th March, 2004, the following note for consideration was sent on 23rd March, 2004 which is being reproduced for ready reference: In this case the depreciation claim was made originally at 20 per cent. Subsequently vide letter dt. 23rd Oct., 1996 in the course of assessment proceedings the assessee made a revised claim at the rate of 40 per cent per annum. The ITO was, therefore, obliged to entertain it and consider it on merits. The Hon'ble Bombay High Court Nagpur Bench in the case of CIT v. Prabhu Steel Industries (P) Ltd. has taken such a view as is evident from the last para of the order. You may therefore reconsider.
Received the above note with date mentioned as 22nd March, 2004 in the late afternoon of 23rd March, 2004. Learned AM may take corrective action.
With respect to the points for consideration in the proposed order in the case of Jt. CIT v. Hero Honda Finlease Ltd., I would like to state that the proposed order has been made in the light of the submissions made before the Bench at the time of hearing. The peculiar facts and circumstances as well as the order of the tax authorities have been fully considered. Considering which and taking note of the pointed objections of the learned Departmental Representative which were not rebutted by the learned Authorised Representative, the issue has been restored with specific directions to the file of the CIT(A). The impugned order has been set aside and the issue has been restored by way of detailed reasons brought out in paras 10 and 11 of the proposed order addressing the specific facts of the case.
The legal position on the claim of higher depreciation has also been discussed in para 12 of the proposed order. However, the entitlement thereto vis-a-vis facts of the case has not been looked into. Thus, apart from the other objections posed by the Departmental Representative relying upon the assessment order which issue too has not been addressed by the CIT(A) who proceeds to decide on the basis of past history without any discussion as to how the facts in the year under consideration justify a higher depreciation has to be seen. The certificate of the assessee, does not in categorical terms state that the relevant documents were before the AO for establishing the user for higher depreciation and the grievance of the Revenue is also on the point that there was no material before AO and CIT(A) has not looked into this factual aspect.
The arguments advanced before the Bench by the learned Authorised Representative who stated that the issue is covered in his favour have been recorded in para 3 of the proposed order. The arguments of the Departmental Representative contending that the issue is not covered on account of certain peculiar facts have been brought out in paras 4, 5, 6, 7 and 8 of the proposed order. The rejoinder of the assessee has also been brought out in para 9 of the proposed order.
Thus, after recording the peculiar facts, circumstances, position of law, the issue has been restored to the file of the CIT(A) to address the specific reasons given by the AO for disallowing the claim of the assessee and for verification on facts, if necessary. The judgment of the Bombay High Court in the case of CIT v. Prabhu Steel Industries (P) Ltd. not cited for and on behalf of the assessee in the course of the hearing before us which has been cited by your Goodself for confirming the impugned order can be cited by the assessee before the CIT(A) as the issue has not been decided against the assessee and simply has been restored to the file of the CIT(A) for addressing the specific objections of the AO and for a verification of facts by way of a speaking order.
My learned colleague had sent order running into 1 to 13 paras. The Revenue has also taken a ground that the claim of the assessee for higher depreciation was made beyond the period stipulated Under Section 139(5) of the Act and the learned CIT(A) ought to have considered this fact before allowing higher depreciation to the assessee. My learned colleague since did not address on this issue in specific and restored the matter back to the learned CIT(A) to address on the specific reason taken by the AO, an internal note on 22nd March, 2004 was sent to her.
However, she has written a further order running into six paras, stating the same to be part of the original proposed order. In my view, after writing the initial order, she had become functus officio, therefore, without going into the subsequent order, I consider it my bounden duty to answer the question raised by Revenue in their appeal before us and accordingly proceed to deal the same hereinafter.
11. The AO is found to have stated that the assessee made the claim of depreciation @ 20 per cent in the original return filed by it. However, before the assessment was finally completed, the assessee had corrected the claim of depreciation to be allowed @ 40 per cent on the basis of user of the assets leased out though such claim was made without revising the return in terms of Section 139(5) of the Act. The AO holds that the claim made is beyond the time prescribed under the Act and the same cannot be entertained. However, he is found to have considered the claim of the assessee on merits and the same is borne out from internal p. 3 of his order. He has restricted the claim to 20 per cent as against the claim of 40 per cent made by the assessee. The learned CIT(A), however, going by the decision taken by the AO on merit considered the issue in depth and directed the AO to allow the claim of depreciation @ 40 per cent conforming to his decision taken in appeal in assessee's own case for the asst. yr. 1996-97.
12. The perusal of the impugned order as well as order of the AO reveals that the assessee's claim for deduction for 40 per cent of depreciation has eventually been considered on merits by the assessing authority and adjudicated by the learned CIT(A) also. The AO had rejected the assessee's claim of higher depreciation on the ground that assessee had not made such a claim in the return filed by it though the claim of depreciation was there and particulars were also available on record. The assessee thus is found to have corrected its claim of depreciation made in the original return. Such correction of claim will not tantamount to making a new claim particularly when the claim for depreciation had already been made in the return. Thus revision of return Under Section 139(5) was not necessary. It has to be understood that there is a distinction between the revised return and correction of the return. If the assessee files some application for correcting a return already filed, or making amendments therein, it would not mean that he has filed a revised return, but once a revised return is filed, the original return must be taken to have been withdrawn and to have been substituted by a fresh return for the purpose of assessment. Such a view finds support from the decision of Hon'ble Allahabad High Court in the case of Dhampur Sugar Mills Ltd. v. CIT . In that view of the matter, the correction of claim could not have been treated as a revised return filed beyond period prescribed Under Section 139(5) of the Act. The claim of the assessee was therefore justified and maintainable. It is also the bounden duty of the AO to consider and allow the correct statutory deduction/ allowance to the assessee while making the assessment of his income. The circular of the CBDT as reproduced by the apex Court in the judgment in the case of CIT v. Mahendra Mills (2000) 159 CTR (SC) 381 : (2000) 243 ITR 56, 62 (SC) reads as under: The circular of the Central Board of Revenue [No. 14 (SL-35) of 1955, dt. 11th April, 1955], required the officers of the Department 'to assist a taxpayer in every reasonable way, particularly in the matter of claiming and securing reliefs.... Although, therefore, the responsibility for claiming refunds and reliefs rests with the assessees on whom it is imposed by law, officers should-(a) draw their attention to any refunds or reliefs to which they appear to be clearly entitled but which they have omitted to claim for some reason or other.
13. The AO thus was duty bound to have assisted and consider the claim higher depreciation which he also appears to have considered on merit in the last para at internal p. 3 of his order. Furthermore, as the assessee had made the claim before the completion of the assessment, such claim was otherwise also liable to be considered during the assessment proceedings as has also been held by the Bombay High Court in the case of CIT v. Prabhu Steel Industries (P) Ltd. : The ITO had rejected the assessee's claim to deduction Under Section 80J, inter alia, on the ground that the assessee had not claimed it in its return. In appeal, the AAC held that since the claim had been made by the assessee during the course of the assessment proceedings, the ITO should not have rejected it. The Tribunal held that insofar as the Revenue's appeal to it was concerned, the AAC was fully justified in entertaining the claim for deduction Under Section 80J because the claim had been made by the assessee before the assessment was completed i.e., during the assessment proceedings.
In the light of findings reached and position enunciated hereinabove, I do not find any merit in the second ground raised by Revenue, as there is no infirmity in the decision of the learned CIT(A) in considering the issue on merits as the AO himself had taken the decision on merit.
Since there was no ground on validity of claim, the learned CIT(A) was not bound to address thereon, while adjudicating the issue in appeal before him though the claim made was valid in law. Furthermore, as that issue does not arise from the order of learned CIT(A) the second ground of Revenue in appeal is liable to be dismissed on that count also.
However, the learned CIT(A) followed the decision in assessee's own case for the asst. yr. 1996-97 rendered by his predecessor for allowing higher depreciation. This decision of learned CIT(A) came up for consideration of the Tribunal which has been set aside and restored to the file of the AO to verify actual user of leased vehicles by the lessee and adjudicate the issue afresh in the light of the decision of Hon'ble jurisdictional High Court in the case of CIT v. Bansal Credits Ltd. and Ors. (2003) 179 CTR (Del) 23 : (2003) 259 ITR 69 (Del). My learned colleague in her judgment has also, however, restored the matter to the file of the learned CIT(A) to take a decision in the light of the said judgment of jurisdictional High Court though the issue has been restored to learned CIT(A) in place of AO, it will not make material difference. For that matter, I concur with her view for deciding the issue in the light of aforesaid decision rendered in the case of Bansal Credits Ltd. (supra).
14. Accordingly, Revenue's appeal stands partly allowed for statistical purposes only.
15. Since, there is difference of opinion between the Members the following question is referred to the Hon'ble President of the Tribunal for deciding the same as contemplated in Section 255(4) of the Act: Under the facts and findings whether there is any justification to restore the matter to learned CIT(A) for addressing on maintainability of claim of higher depreciation with reference to provisions of Section 139(5) of the Act or that the Tribunal is bound to answer the question when it is raised before it and the decision taken thereon is justified? Whether a finding of fact can be given in a dissent order where the specific issue, raised in the Departmental appeal of return filed beyond the time limit laid down Under Section 139(5) has not been argued by the assessee before the Tribunal; or should the issue be restored to the CIT(A) for considering the finding of facts brought out in the assessment order, as has been done in the leading order? The point of difference between the two learned Members has been referred to me by the Hon'ble President Under Section 255(4) of the IT Act.
16. The assessee is a company engaged in leasing business. In respect of the year under appeal, it claimed depreciation on the trucks @ 20 per cent in the return of income. However, on 23rd Oct., 1996 a letter was filed before the AO in the course of the assessment proceedings revising the claim to 40 per cent. It was explained that the trucks were run on hire and according to the depreciation table, the admissible rate of depreciation was 40 per cent. It was stated that the claim @ 20 per cent made in the return was due to inadvertence and that the same was being revised to 40 per cent. The claim of depreciation was accordingly revised to Rs. 13,43,748 as against Rs. 10,28,368 claimed originally. The AO observed that the revised claim can be made only under a revised return filed Under Section 139(5) of the IT Act and the mere filing of a letter, which was beyond the time limit prescribed by Section 139(5) for filing the revised return cannot be entertained. He accordingly treated the letter as non est.
Nevertheless, he examined the merits of the assessee's revised claim of depreciation and observed that it was not allowable, following the judgments of the Rajasthan High Court in CIT v. Manjeet Stone Co.
and CIT v. Sardar Stones (1995) 125 CTR (Raj) 197 : (1995) 215 ITR 350 (Raj). He also referred to the Board's Circular No.652, dt. 14th June, 1993 wherein it was observed that the higher rate of depreciation @ 40 per cent was not available to an assessee, other than the one who is running the vehicles for hire. The assessment was completed accordingly. On appeal, the CIT(A) did not specifically go into the question whether the assessee's claim made by a letter can be entertained by the AO or not, presumably because the AO had also examined the claim on merits. He examined the merits of the claim and found that in the asst. yr. 1996-97, his predecessor had accepted the assessee's claim for higher depreciation @ 40 per cent on the trucks by order dt. 29th Nov., 1999. He accordingly upheld the assessee's claim for depreciation @ 40 per cent on the trucks.
17. The Revenue carried the matter in appeal before the Tribunal. The learned JM who wrote the leading order held that since the CIT(A) did not specifically address the question as to whether the higher claim of depreciation could be validly made by a letter, the matter has to be restored to his file with a direction to specifically address this question and pass a speaking order in accordance with law after giving sufficient opportunity to the assessee. So far as the merits are concerned the learned JM agreed that it is covered in favour of the assessee by the judgment of the Hon'ble Delhi High Court in the case of CIT v. Bansal Credits Ltd. and Ors. (2003) 179 CTR (Del) 23 : (2003) 259 ITR 69 (Del) where it was held that where an assessee has leased out the commercial vehicles and the lessee has put them to use in the business of hiring them out, higher depreciation of 40 per cent is allowable to the assessee. Nevertheless, the matter was restored to the CIT(A) with the directions mentioned above. The learned AM however held that the question whether the assessee can make a claim by means of a letter filed in the course of the assessment proceedings without filing a revised return was not decided by the CIT(A) because the AO had himself taken a decision on the claim on merits and the CIT(A) was therefore not bound to address the question of validity of the assessee's claim. He, therefore, disagreed with the learned JM on this point. On merits, he found that the order of the CIT(A) for the asst.
yr. 1996-97 on which the CIT(A) had relied had been set aside on further appeal to the Tribunal and the matter has been restored to the AO to verify the actual user of the leased vehicles by the lessee and adjudicate the issue afresh in the light of the judgment of the Hon'ble Delhi High Court cited above. Accordingly, he restored the matter to the AO with the same directions.
Under the facts and findings whether there is any justification to restore the matter to learned CIT(A) for addressing on maintainability of claim of higher depreciation with reference to provisions of Section 139(5) of the Act or that the Tribunal is bound to answer the question when it is raised before it and the decision taken thereon is justified? Whether a finding of fact can be given in a dissent order where the specific issue, raised in the Departmental appeal of return filed beyond the time limit laid down Under Section 139(5) has not been argued by the assessee before the Tribunal; or should the issue be restored to the CIT(A) for considering the finding of facts brought out in the assessment order, as has been done in the leading order? I have carefully considered the questions, the orders of the IT authorities and the rival contentions. The precise difference between the two learned Members is regarding the question whether the CIT(A) ought to have first decided the question of entertainability of the assessee's higher claim of depreciation by a letter and not by a revised return, before deciding the merits of the claim. In Goetze (India) Ltd. v. CIT , the Supreme Court held that the assessee can make a claim for deduction, which has not been claimed in the return, only by filing a revised return within the time allowed. In the same decision, it was made clear that the power of the Tribunal to admit an additional ground Under Section 254 is not affected by its decision. It was however clarified that the case was concerned with only the power of the assessing authority and not the appellate authority. Under Section 250(5), the CIT(A) has the power to allow the appellant to go into any ground of appeal not specified in the grounds of appeal if he satisfied that the omission of the ground from the form of appeal was not wilful and unreasonable. Dealing with such a power, the Bombay High Court in CIT v. Prabhu Steel Industries (P) Ltd. , held that where a claim for special deduction was made by the assessee not in his return but in the course of the assessment proceedings and the ITO failed to consider the same, it was open to the AAC to entertain the claim. In CIT v. Kanpur Coal Syndicate , it was held by the Supreme Court that the powers of the CIT(A) sitting in appeal over an assessment were plenary and conterminous with those of the AO and that he can do what the ITO can do and also direct him to do what he has failed to do. In the light of the law laid down in this judgment by the Supreme Court, it was open to the CIT(A) to consider the assessee's claim on merits by virtue of his co-extensive power over the assessment proceedings and also by virtue of Section 250(5). That apart, the judgment of the Supreme Court in Goetze (supra) is distinguishable on facts' because in that case the claim was made for the first time in the letter filed by the assessee in the course of the assessment proceedings whereas in the present case the claim of depreciation on the trucks @ 20 per cent was already made in the return of income and it was merely enlarged to 40 per cent on the footing that the assessee was running the trucks on hire. It cannot be said to be an entirely new claim made for the first time in the letter filed by the assessee in the course of the assessment proceedings. The CIT(A) therefore committed no error in dealing with the assessee's appeal on merits. Moreover, the AO himself has examined the claim on merits though he earlier held that the claim was not entertainable and the letter was non est. A decision having been given by him on merits it was open to the CIT(A) to deal with the merits. I, therefore, agree with the learned AM that the CIT(A) was not precluded from dealing with the assessee's claim for higher depreciation on merits.
19. Coming to the merits of the assessee's claim, the learned AM has observed that for the asst. yr. 1996-97, the Tribunal has restored the matter to the AO for verification of the assessee's claim in the light of the judgment of the Hon'ble Delhi High Court in Bonsal Credits (supra). I agree with the course adopted by the learned AM.20. In the result, I agree with the order passed by the learned AM. The matter will now be placed before the regular Bench for passing appropriate orders.