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Issues Involved:
1. Entitlement to deduction of Rs. 85,907 under section 10(2)(vii) or 10(2)(xv) of the Indian Income-tax Act, 1922. 2. Entitlement to deduction of Rs. 2,203 under section 10(2)(vi) of the Indian Income-tax Act, 1922. Issue-wise Detailed Analysis: 1. Entitlement to deduction of Rs. 85,907 under section 10(2)(vii) or 10(2)(xv): The primary question was whether the assessee was entitled to a deduction of Rs. 85,907 under section 10(2)(vii) or 10(2)(xv) of the Indian Income-tax Act, 1922. The assessee, who carried on business as an exhibitor of films, claimed this deduction as a balancing allowance. The Income-tax Officer rejected this claim, considering it a capital loss, not allowable under the Act. The Appellate Assistant Commissioner and the Income-tax Appellate Tribunal affirmed this decision, concluding that the assessee was not the owner of the building and hence not entitled to the benefit of section 10(2)(vii). The court noted that for the assessee to succeed under section 10(2)(vii), he must establish ownership of the building and that it had been "sold or discarded or demolished or destroyed." The court found that the assessee was still in possession of the theatre and continued to exhibit pictures there, hence he had not "discarded" the building. Additionally, the court rejected the argument that the building should be deemed "sold" to the lessor upon lease expiration, noting that the ordinary meaning of "sale" involves handing over property for a price, which had not occurred. The court held that the assessee was not entitled to the deduction of Rs. 85,907 under section 10(2)(vii) or 10(2)(xv), as the conditions for these sections were not met. 2. Entitlement to deduction of Rs. 2,203 under section 10(2)(vi): The assessee claimed a depreciation allowance of Rs. 2,203 under section 10(2)(vi) for the building. The Income-tax Officer allowed this depreciation, but the Appellate Assistant Commissioner directed its withdrawal, arguing that the assessee was not the owner of the building. The Tribunal upheld this decision. The court, however, concluded that the assessee was the owner of the superstructure during the lease period, referencing the Supreme Court's decision in Dr. K. A. Dhairyawan vs J. R. Thakur. Therefore, the assessee was entitled to the depreciation allowance under section 10(2)(vi). Conclusion: The court answered that the assessee was not entitled to the deduction of Rs. 85,907 under section 10(2)(vii) or 10(2)(xv) but was entitled to deduct Rs. 2,203 under section 10(2)(vi) as an allowance for depreciation. Both parties having partly succeeded and partly failed, no order as to costs was made.
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