1985 (1) TMI 9 - HC - Income Tax

Summary

Issues:
1. Depreciation allowance on assets like roads, drains, culverts, swimming pools, parks, and fencing for the assessment year 1968-69.
2. Admissibility of depreciation on drains, culverts, and roads for the assessment years 1965-66 and 1966-67.
3. Depreciation allowance on drains, culverts, and roads for the assessment year 1969-70.

Analysis:
1. For the assessment year 1968-69, the issue was whether depreciation allowance should be granted on assets such as roads, drains, culverts, swimming pools, parks, and fencing. The Income-tax Officer initially rejected the claim for depreciation. The Appellate Assistant Commissioner directed a detailed review to allow depreciation where due based on earlier principles. The Appellate Tribunal, following its previous decision for the assessment years 1965-66 and 1966-67, upheld the Income-tax Officer's decision, denying depreciation on these assets. The High Court referred to a previous case and held that if assets like roads, drains, and culverts are considered buildings and used for business purposes, depreciation is admissible. Therefore, the court ruled in favor of the assessee, allowing depreciation on drains, culverts, and roads for the assessment year 1968-69.

2. The issue for the assessment years 1965-66 and 1966-67 involved the admissibility of depreciation on drains, culverts, and roads. The High Court had remanded the matter to the Tribunal in a previous judgment to determine if these assets qualify as buildings and if depreciation is applicable based on their use for business purposes. The court referred to a specific case where it was held that roads within a factory compound are part of the building used for business and thus eligible for depreciation. As the court had previously ruled that depreciation is admissible on such assets, it answered the question in the negative, favoring the assessee.

3. In the assessment year 1969-70, the issue was whether depreciation should be allowed on drains, culverts, and roads. The High Court relied on its previous decision in a specific case to determine the principles governing depreciation on these assets. Based on the earlier ruling that depreciation is admissible on drains, culverts, and roads if they are considered buildings and used for business purposes, the court answered the question in the negative, in favor of the assessee. Therefore, for the assessment year 1969-70, depreciation was held to be admissible on drains, culverts, and roads.