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TMI Blog2007 (11) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... ing on 31.03.1984. During the relevant year the appellant constructed a building for the purpose of residence for its low paid employees and claimed initial depreciation @ 40% under Section 32(1)(iv) of the Act amounting to Rs.43,505/- on the actual cost of the building i.e. Rs.1,08,757/-. The Income Tax Officer (ITO) vide its order dated 15.1.1985 rejected the claim of the assessee-appellant on the ground that the said provision is applicable to an assessee carrying on "business" and the same is not available to a professional. 4. The Commissioner of Income Tax (Appeals) [for short CIT (A)] by its order dated 30.4.1985 reversed the order of the Income Tax Officer relying upon the judgment of this Court in Barendra Prasad Ray V. Income Tax Officer, 1981 (2) SCC 693, and allowed the claim of the appellant with the further direction to the Income Tax Officer to grant initial depreciation @ 40% for the building erected by the appellant for the residential purposes of its employees. 5. Being aggrieved by the order passed by the CIT(A), Revenue filed an appeal before the Income Tax Appellate Tribunal (for short "the Tribunal"). The Tribunal revers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sp; xxx (ii) in the case of buildings, machinery, plant or furniture, other than ships covered by clause (i), such percentage on the written down value thereof as may in any case or class of cases be prescribed: Provided that where the actual cost of any machinery or plant does not exceed [five thousand rupees], the actual cost thereof shall be allowed as a deduction in respect of the previous year in which such machinery or plant is first put to use by the assessee for the purposes of his business or profession; Provided further that no deduction shall be allowed under this clause or clause (iii) in respect of any motor car manufactured outside India, where such motor car is acquired by the assessee after the 28th day of February, 1975, and is used otherwise than in a business of running it on hire for tourists; (iia) xxx &nbs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thin its fold other term if the context so requires. That, the word "business" appearing in sub-clause (iv) of Section 32(1) in the context clearly refers to both "business" and "profession". That, the word "business" is used in the context of employees and is clearly intended to cover both "business" as also "profession". It was contended that Section 32(1) (iv) should be given a purposive interpretation to extend the benefit to the professionals as well. That if two opinions are possible, then the one in favour of the assessee should be adopted. 10. It is submitted that in Barendra Prasad Ray's case (supra), this Court in the context of Section 9 of the Act, has construed the words 'business connection' to include professional connection as well. It was observed that the expression "business" does not necessarily mean trade or manufacture only and the same is used as including within its scope professions, vocations and callings from a long time. It is further submitted that Barendra Prasad Ray's case (supra) was clearly applicable to the facts of the present case and the High Court has erred in distinguishing the same. 11. As against t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ildings, machinery, plant or furniture which is owned by an assessee and used for the purposes of "business or profession", depreciation shall be available by way of deduction. Section 32(1) uses the phrase "the following deductions shall", therefore it is apparent that the said sub-section is laying down general conditions or basic requirements, on fulfillment of which, an assessee shall become eligible for deductions as provided in the various clauses which follow. The learned counsel appearing for the Revenue has rightly contended that from the Scheme of the Section it is discernible that various clauses shall operate on further specific conditions laid down in each individual clause. Clause (i) deals with case of ships other than ships ordinarily plying on inland waters, clause (ii) pertains to buildings, machinery, plant or furniture, other than ships and is applicable to both business and profession in regard to the claim for depreciation in respect of the building , machinery, plant or furniture. In clause (iv) the legislature has used the word "business" only. It means that the legislature was conscious of the fact that the business and profess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of which an assessee shall become eligible for deduction as provided under various clauses which follow. Clauses (i), (ii) and (iv) operate in different fields and deal with different set of assessees for the purposes of claiming depreciation. In our opinion Barendra Prasad Ray's case (supra) has no application in the present case. 17. Part D consists of Sections 28 to 43 of the Act which deals with profits and gains of business or profession. Though the phrase has been used in certain sections as "business or profession", but nowhere has the phrase been used as the "business and profession". In fact, wherever the legislature intended that the benefit of a particular provision should be for both business or profession, it has used the words "business or profession" and wherever it intended to restrict the benefit to either business or profession, then the legislature has used the word either "business" or "profession", meaning thereby that it intended to extend the benefit to either "business" or "profession", i.e., the one would not include the other. 18. We agree with the submission made by the counsel for the appellant that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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