The judgment of the court was delivered by
L. Narasimha Reddy J.-
The respondent is a hatchery and is an assessee under the Income-tax Act, 1961 (for short "the Act"). For the assessment year 1992-93, it claimed 100 per cent. depreciation on cages purchased by it. In the order of assessment, dated April 19, 1993, the assessing authority allowed the depreciation by taking into account certain precedents. The Commissioner of Income-tax (Appeals), however, exercised powers of suo motu under section 263 of the Act and passed an order dated October 30, 1995. He took the view that though the cost of each cage is less than Rs. 5,000, they can be put to proper use only when they are attached to each other. Therefore, he disallowed the depreciation. Aggrieved by that, the respondent filed I. T. A. No. 437/Hyd/1996 before the Hyderabad Bench "A" of the Income-tax Appellate Tribunal. The Tribunal allowed the appeal through its order dated October 16, 2001. Hence, this appeal by the Department under section 260A of the Act.
2. Heard Sri J. V. Prasad, learned counsel for the appellant, and Sri Y. Ratnakar, learned counsel for the respondent.
3. On his part, the Assessing Officer was satisfied with the claim of the respondent for depreciation on the cages, to carry birds that are produced in the hatchery. The Commissioner, however, reopened the matter by issuing a notice under section 263 of the Act. According to him, the situation is covered by the judgment of the Karnataka High Court in Pathange Poultry Farm v. CIT [1994] 210 ITR 668 (Karn). The purport of that judgment was that if an item on which the depreciation is claimed, can be put to use only in tandem for other similar units, the cumulative cost must be taken into account in the context of allowing depreciation. The Commissioner took the view that though the cost of each cage purchased by the respondent during the concerned assessment year was less than Rs. 5,000, the cages were not put to use independently and they were utilised in fabrication of a bigger compartment with common facilities of lighting, feeding, watering, etc. Accordingly, the depreciation was denied.
4. In the appeal, before it, by the respondent, the Tribunal discussed the matter at length with reference to the relevant precedents. The principle governing the exercise of power in a revision was taken note of. The principle is to the effect that where two views of a particular aspect are possible, for an Income-tax Officer, and he has chosen one, the Commissioner cannot reopen the matter on the ground that another view is possible. The second ground where the power can be exercised is that the order passed by the Assessing Authority is patently illegal. The Tribunal found that none of the grounds exist in the instant case. Learned counsel for the Department is not able to demonstrate as to how the order passed by the Tribunal is erroneous. At any rate, the question as to whether a particular unit can be used independently or in tandem with similar units, is a pure question of fact and the same cannot be dealt with in an appeal under section 260A of the Act.
5. The appeal is accordingly dismissed. There shall be no order as to costs.
6. The miscellaneous petition filed in this writ appeal shall also stand disposed of.