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TMI Blog1992 (6) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... for each of the assessment years in the case of these assessees, the assessees preferred appeals before the Dy. Commissioner of Income-tax (Appeals), Visakhapatnam. The appeals of these assessees were clubbed together and disposed of by two separate orders dated 29-11-1988 by the Dy. Commissioner (Appeals), Visakhapatnam. On behalf of the assessees it was contended before the Dy. Commissioner (Appeals) that the provisions of section 10(2)(vi) of the Indian Income-tax Act, 1922 are not quite analogous to the provisions of section 32 of the Income-tax Act, 1961. The crucial use of words in section 10(2)(vi) of the Indian Income-tax Act, 1922 were " being the property of the assessee " is not the same thing as the expression " owned by the assessee " used in section 32 of the Income-tax Act, 1961. It was also contended that there was no provision analogous to section 26 of the IT Act 1961 in the Indian Income-tax Act, 1922. However, it was argued that the matter is squarely covered by the order of this Tribunal 'A' Bench in the case of East Coast Packaging Ltd. [IT Appeal No. 397 (Hyd.) of 1982] which took the view that a fractional depreciation is admissible to the co-owners of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Supreme Court decision would form the basis of rectification and therefore on the basis of Seth Banarsi Dass Gupta's case the action of the Income-tax Officer is within his powers inasmuch as the powers under section 154 can be invoked for withdrawal of depreciation which was illegally allowed --- Addl. CIT v. Kanta Behan [1983] 140 ITR 187 (Delhi) Anchor Pressings (P.) Ltd. v. CIT [1986] 161 ITR 159 (SC). 3. Shri Y. Ratnakar, learned advocate for the assessees-respondents, countered the arguments advanced by the learned Departmental Representative by his following submissions : (i) Where the matter admits of small debate, the powers of rectification would not be available to the Income-tax Officer. (ii) The meaning of the words " owned by the assessee " used in section 32(1) of the IT Act, 1961 are different and connotes different meaning than the words used " being the property of the assessee " in section 10(2)(vi) of the Indian Income-tax Act, 1922. He argued that the term 'property' includes 'ownership' but converse is not true. According to him ownership may not include property. He submitted that property includes ownership, possession and enjoyment. He further argu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in reference by A. Bench of this Tribunal in R.A. No. 211/Hyd/1982 in East Coast Packaging Ltd.'s case. In fact he filed a copy of the rejection order dated 27-7-1983 passed by the Tribunal in the above reference application. Para 3 occurring in the above rejection order is as follows : " Aggrieved, the assessee filed an appeal before the Tribunal. The assessee's representative contended that the Commissioner of Income-tax (Appeals) was not justified in disallowing the claim on the ground that no depreciation is admissible where the asset is owned by more than one person. that the decision in 81 ITR 170 is not applicable to the assessees case since the wording used in 1961 Act is different from that used in 1922 Act, that since the asset to the extent owned by the assessee is earning income and such income is subjected to tax the assessee is entitled to depreciation in respect of the cost to him and the use of the word " owner " has a wider meaning in that it includes a partial ownership also. " 4. Having heard both sides, fully in the matter, we are unable to accept any of the contentions advanced by the learned advocate for the assessee. Taking up first the argument that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ling a writ petition under section 226 of the Constitution of India. The prayer in the petition is to " revise the order dated 2nd November 1957, of the first respondent and issue direction in pursuance thereof. " The High Court granted the application. When the matter came up before the Supreme Court, it held that in view of the judgment of the Supreme Court in CIT v. Khatau Makanji Spg. Wvg. Co. Ltd. [1960] 40 ITR 189, the levy of additional tax was illegal. Ultimately it upheld the order of the Bombay High Court. Thus it could be seen that though the Income-tax Officer while rejecting the claim of the assessee for refund of tax based upon a specific finding that the original assessment order for 1952-53 was passed long before the judgment of the Bombay High Court in Khatau Makanji Spg. Wvg. Co. Ltd.'s case holding that the levy of tax on excess dividend was illegal, still duly taking the said fact also into consideration the Hon' ble Supreme Court held that the order directing to refund additional tax on the excess dividend passed by the Bombay High Court is perfectly justified though the said order relate to the assessment year 1952-53. In Sampath Iyengar's Law of Income-ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no quarrel with this principle, however, we are of the view that this does not advance the case of the assessee. If the contention of the learned advocate that the finding of the Supreme Court in Seth Banarsi Dass Gupta's case that the benefit of depreciation can be granted if the assessee is full owner of the property but it is not admissible in respect of a fractional claim is not the ratio of the decision but it is only a casual observation, this argument is not appealable to us. In the facts of the case before the Supreme Court, the assessee who acquired 1/6th share in S.B. Sugar Mills claimed that he was entitled to claim depreciation. Therefore, the question whether a fractional owner is entitled to claim depreciation pointedly came up for consideration before the Hon'ble Supreme Court and the Hon'ble Supreme Court before deciding the issue had fully considered the arguments advanced on this topic on either side and also kept before them the decision of the Hon'ble Allahabad High Court---Seth Banarsi Dass Gupta v. CIT [1971] 81 ITR 170 against which the appeal was preferred to the Hon'ble Supreme Court. In fact their Lordships of the Supreme Court extracted the relevant porti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cision, it cannot be held that the Supreme Court decision has no binding force. Thus we, hold that what we have extracted above is the ratio decidendi of the Supreme Court and is not a casual observation. 6. Next let us take up the contention that the wording of section 10(2)(vi) especially words " being the property of the assessee " covered much wider field than the words used in section 32(1) of the Income-tax Act, 1961, more particularly, the words " owned by the assessee " occurring in it. It is contended that property is a much wider term than ownership. Property comprises of a bundle of rights, namely, ownership, possession and enjoyment. Virtually the argument is that section 10(2)(vi) of the IT Act 1922 is much wider in its application than section 32(i). Whereas in section 10(2)(vi) three facets of property right, namely, ownership, possession and enjoyment were comprehended in section 32(1) only one out of such facts of the property, namely, ownership was contemplated. For that reason also it is contended that because the Hon'ble Supreme Court had decided in Seth Banarsi Dass Gupta's case a case falling under section 10(2)(vi) of the Indian Income-tax Act, 1922, the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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