The furnishing of particulars by the assessee in his return is a condition precedent to claim the deductions, and once a revised return is filed, the original return is substituted by the revised return.

1. In this reference under section 256(2) of the Income-tax Act, 1961, the Tribunal has referred the following questions of law for the opinion of this court :

"(1) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in concluding that the revised return is totally in substitution of the original return and that the revised return alone has to be taken into consideration in completing the assessment ?

(2) Whether the Appellate Tribunal was not in error in concluding that the claim for depreciation in the original return is to be ignored when no claim is made in the revised return filed subsequently ?

(3) Whether the Appellate Tribunal was not in error in concluding that the claim for depreciation is a choice left to the assessee and cannot be allowed when not claimed in the revised return ?"

2. The assessee is a company carrying on manufacture of grinders. For the assessment years 1973-74 and 1975-76, the assessee filed revised returns whereby withdrew its claim regarding depreciation. The Income-tax Officer, however, allowed depreciation to the assessee as per details furnished by the assessee along with the original return. On appeal, the Commissioner of Income-tax (Appeals) confirmed the Income-tax Officer's order. On further appeal, the Appellate Tribunal has held that the Income-tax Officer was not justified in allowing the depreciation. For coming to this conclusion, the Tribunal as relied upon the decision in Beco Engineering Co. Ltd. v. CIT [1984] 148 (P andamp; H) as also the instructions of the Central Board of Direct Taxes dated September 4, 1972, to the effect that the board will have no objection to the line of action suggested by the assessee, as there is nothing in law to hold that it is mandatory for the assessing authority to allow depreciation even if the assessee withdraws his claim. There is divergence of opinion between various High Court on this question. While the Allahabad and Madras High Courts have decided the question in favour of the Revenue in Ascharajlal Ram Parkash v. CIT and Dasaprakash Bottling Co. v. CIT, respectively, a divergent view is taken by the Punjab and Haryana High Court in Beco Engineering Co. Ltd. v. CIT and the Bombay High Court in CIT v. Shri Someshwar Sahakari Sakhar Karkhana Ltd. [1989] 177 ITR 443.

It is urged by Sri Raghavendra Rao, learned counsel for the petitioner, that having regard to the language of section 32 of the Act, it is incumbent upon the assessing authority to allow depreciation if necessary materials are found on record. Learned counsel seeks to place emphasis upon the expression "shall" in the section. On the contrary, Sri K. P. Kumar, learned counsel for the assessee, submitted that the provisions of section 32 are clearly governed by section 34(1), as it stood at the relevant period, which reads thus :

"S. 34. (1). The deductions referred to in sub-section (1) or sub-section (1A) of section 32 shall be allowed only if the prescribed particulars have been furnished ...."

3. There cannot be any doubt that allowing of the deductions as provided under section 32 of the Act itself is subject to the provisions of section 34. Here, learned counsel for the assessee laid emphasis upon the requirement under sub-section (1) of section 34 to state that the furnishing of particulars by the assessee in his return in a condition precedent to claim the deductions, and if he does not choose to do so, it is not at all mandatory for the Income-tax officer to find something on the record to impose that benefit upon the assessee. It is further submitted by learned counsel that the Board instructions relied upon are traceable to the jurisdiction of the Board under section 119 of the Act. There is considerable force in both these contentions.

4. In CIT v. Shri Someshwar Sahakari Sakhar Karkhana Ltd. [1989] 177 ITR 443, the Bombay High Court has similarly interpreted the provisions of section 32 read with section 34 of the Act.