Rectification of wrongly claimed depreciation, through filing of a letter to AO, is allowed when no fresh claim is made
The assessee claimed the depreciation on a newly installed windmill on the basis of WDV method at the rate of 15%. Subsequently, when assessee realised the mistake that correct rate of depreciation would be 80%, it filed a letter before assessing officer to rectify the claim and to provide deprecation at the rate of 80%. The assessing officer rejected the claim considering the principle laid down by the Supreme Court in Goetze (India) Ltd. vs. CIT [2006] 157 Taxman 1 that a fresh claim cannot be made by the assessee other than by filing a revised return.
The Tribunal held that the assessee was not making a fresh claim before the assessing authority. Infact, the assessee had made a claim for depreciation but the rate chosen was not a correct one. Thus, the judgment of the Supreme Court in the Goetze (India) Ltd. (Supra) would not apply to the present case. Further, as per Explanation 5 to Section 32(1), the depreciation would be allowed whether or not the assessee has claimed the depreciation in computing the total income. Therefore, the assessing officer was duty bound to allow the depreciation computed at the correct rate provided under the Act. - ITO v. SRI BALAJI SAGO AND STARCH PRODUCTS [2012] 19 taxmann.com 313 (Chennai - Trib.)