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TMI Blog1983 (3) TMI 118X X X X Extracts X X X X X X X X Extracts X X X X ..... chinery. 2. According to the facts, the assessee had purchased certain plant and machinery jointly with Extrusions at a total cost of Rs. 3 lakhs. In the balance sheet of the assessee the half share of the assessee in the asset is shown at a value of Rs. 3 lakhs. This plant and machinery has been hired out by the assessee and Extrusions to Laminated Packings (P.) Ltd., Visakhapatnam. The hire charges received by the assessee on this account are being duty subjected to tax. The claim of the assessee was that the depreciation should be allowed on this asset. It is no doubt that this point was not raised before the ITO. It is for the first time that the assessee raised this ground before the Commissioner (Appeals). Before the Commissioner (A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an one person and for this purpose the learned Commissioner (Appeals) relied on the decision of the Allahabad High Court in the case of Seth Banarsi Das Gupta, which is not applicable to the facts of this case. It was further submitted that the said decision rendered under the 1922 Act is not applicable since the wording used in the 1961 Act is different from that used in the 1922 Act. The learned counsel also submitted that since the asset to the extent owned by the assessee is earning income and such income is subjected to tax, the appellant is entitled to the depreciation in respect of the cost to him. Lastly, the learned counsel submitted that the use of the word ' owner ' has a wider meaning in that it includes a partial ownership also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to the computation of income from property. There is no such statutory statement of how income from exploiting other assets owned jointly should be assessed. How much income is to be assessed, i.e., whether as an AOP or in the hands of each of the owners separately, has, thus, to be decided on the facts of each case. In the present case it would appear from the facts as detailed in the order of the Commissioner (Appeals) that the asset has been jointly exploited by the assessee and Extrusions by hiring out the same to Laminated Packings (P.) Ltd. The possibility of income from this source being assessable in the hands of the assessee and Extrusions jointly as an AOP is definitely there. But the ITO did not proceed to assess the income un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ged that clause (vi) is attracted even where an assessee owns a fractional share in the machinery. On the other hand, Mr. Brij Lal Gupta appearing for the department urged that ownership of a fractional share in machinery does not attract clause (vi). The point is not free from difficulty. But if the interpretation suggested by Mr. Shanti Bhushan is accepted, the result would be that several individuals would claim depreciation separately on the short ground that they have specified shares in buildings, machinery, plant or furniture. A firm or association of persons would also claim depreciation on the ground that the building, machinery, plant or furniture is the property of the firm or association of persons. Such separate claims for depr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... machinery, etc. of the mill vested in two of its partners, who had, however, allowed the use of machinery, etc. of the mill to the assessee, it was held that the assessee-firm was not entitled to depreciation allowance in respect of machinery, etc. and, further, that the question of distributing the depreciation allowance equally between the two partners could not also arise. It was pointed out that it was the firm which was the assessee and the depreciation allowance had therefore to be allowed or disallowed with respect to the assessee-firm . . . ." In the case of CIT v. Bordubi Rice, Flour Oil Mills [1976] 105 ITR 739, the Gauhati High Court has pointed out that where the firm owned the property the depreciation had to be allowed wit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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