COMMR. OF INCOME TAX AP I HYD V. PARKE DAVIS (INDIA) LTD

RC/113/1997

AI Insights

The case involves the Income Tax Appellate Tribunal's decision on several legal questions concerning the assessment year 1986-87, specifically related to the depreciation rate on a 'creche building' and the recognition of liabilities under the Drugs (Price Control) Order Act, 1979. The Tribunal had allowed a higher rate of depreciation and recognized certain liabilities as statutory, which the revenue challenged. The High Court reviewed these decisions, referencing a similar case (R.C.No.124 of 1996) for questions 1, 3, and 4, and independently assessed question 2 regarding the depreciation rate.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 718983 (HC-HYDERABAD)
• Appeal Type: Others
• Pronouncement Date: 11-02-2014
• Assessment Year: misc
• Other Referred Cases: CIT v. Standard Motor Products of India Ltd. (142 ITR 877)
• Laws Referred To: Drugs (Price Control) Order Act, 1979
• Result in Favour of: Applicant
• Court: HIGH COURT
• Keywords: Depreciation; Statutory Liability; Creche building; Drugs (Price Control) Order
• Section: 10

Judgement Text

"HON’BLE SRI JUSTICE G. CHANDRAIAH AND HON’BLE SRI JUSTICE CHALLA KODANDA RAM R.C. No.113 OF 1997 ORDER:- (per Hon’ble Sri Justice Challa Kodanda Ram) At the instance of the Revenue, the Income Tax Appellate Tribunal, Hyderabad Bench-‘B’ had referred the following questions of law said to be arising out of the order of the Tribunal for the assessment year 1986-87 in I.T.A.No.579/Hyd/1992. 1. “Whether, on the facts and circumstances of the case, the ITAT was correct in law in allowing higher rate of depreciation of 10% on ‘creche building’ for the assessee for the Assessment years 1986-87”? 2. “Whether, on the facts and in the circumstances of the case, the ITAT was correct in law in relying on the decision of CIT v. Standard Motor Products of India Ltd. (142 ITR 877) and in allowing higher rate of depreciation at 10% on ‘creche building’ for the asst. year 1986-87 when the facts in the above case were distinguishable”? 3. “Whether, on the facts and in the circumstances of the case, the ITAT was correct in law in holding that the assessee’s claim of liability for assessment year 1986-87 under the Drugs (Price Control) Order Act, 1979 was a statutory liability and as such it was allowable?” 4. “Whether on the facts and in the circumstances of the case, the ITAT was correct in law in allowing the assessee’s claim of liability for the asst. year 1986-87 under the Drugs (Price Control) Order Act, 1979?” 2) Sri Y. Ratnakar, learned counsel appearing on behalf of the assessee would submit that the questions of law which have been raised in the present referred case are squarely covered by the order dated 05.12.2013 of this Court passed in R.C.No.124 of 1996. Sri S.R. Ashok, learned standing counsel for the revenue also concedes on this aspect. 3) We have perused the copy of the order dated 05.12.2013 passed by this Court in R.C.No.124 of 1996 and we find that the question Nos.1,3 and 4 are identical to the questions which were the subject matter in R.C.No.124 of 1996. In that view of the matter, question Nos.1, 3 and 4 are required to be answered in favour of the assessee and against the revenue. 4) Insofar as the question No.2 is concerned, we need not deal with the same, as on independent appreciation of the facts of the case on record, we caeme to the conclusion that ‘creche building’ would be entitled to be granted higher rate of depreciation at 10%. In that view of the matter, we decline to answer the question No.2. In these circumstances, question Nos.1, 3 and 4 are answered in favour of the assessee and against the revenue and question No.2 is declined to be answered. 5) Accordingly, the Referred Case is disposed of. No order as to costs. Miscellaneous Petitions, if any, pending in this R.C shall stand closed. 6) A copy of the order dated 05.12.2013 in R.C.No.124 of 1996 should be tagged to the copy of this order. ____________________ G. CHANDRAIAH,J ____________________________ CHALLA KODANDA RAM,J Date:11.02.2014. Gk HON'BLE SRI JUSTICE G. CHANDRAIAH AND HON’BLE SRI JUSTICE CHALLA KODANDA RAM R.C. No.113 OF 1997 Date:11.02.2014. Gk "