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TMI Blog1964 (10) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... e cost of the land underneath the building could not be treated as part of the building for purposes of depreciation. The assessee, Messrs. Alps Theatre, Rajpura, went up in appeal to the Appellate Assistant Commissioner against the order of the Income-tax Officer. The Appellate Assistant Commissioner rejected the appeal and affirmed the order of the Income-tax Officer. The relevant part of his order reads thus: Yogi Chanan Ram argued that a building cannot be separated from the land on which it stands for calculations of depreciation. In Mair v. William [1892] 1 Q.B. 264, a building has been defined to mean a block of bricks or stone work covered by a roof. This definition does not include the land on which the building stands. If a building includes the cost of the land then even if the building is dismantled and only the land used, an assessee can claim depreciation on the land alone, on the ground that it forms a part of the building. This would be an absurd claim. According to law, depreciation is admissible on a building used for business purposes. The building is not inclusive of the land on which it stands and at least the Act itself does not say so. The assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the business, etc. Clause (v) makes a provision for allowance in respect of current repairs to such buildings, machinery, plant or furniture, etc. Clause (vi) provides for depreciation of such building, machinery, etc. There is a provision in this clause with regard to the new buildings erected after the 31st March, 1945, and it is provided that a further sum is permitted to be deducted towards depreciation and the rates of deduction are specified in sub-clauses (a) and (b) of clause (vi) so far as buildings are concerned. Clause (via) also allows deductions for and in respect of buildings newly erected, etc. It is not necessary to notice other clauses of this section. Suffice it to say that building is put at par with machinery, plant or furniture. In other words, building is again treated as a unit, like machinery or furniture. This brings me to the consideration of the respective arguments. The argument on behalf of the department is that the land is a capital investment unless it is taken on lease. Where it is taken on lease, the lease money is a legitimate deduction which the Act allows, but where it is purchased it is in the nature of capital investment. The terms ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is to be carried on. The thing most necessary for the use of the cathedral as a place for public worship is that the congregation which frequents it should be able to stand or kneel upon the ground embraced within its walls and forming the floor of it, or sit upon chairs resting upon that floor. The use of the floor is infinitely more essential than the use of a roof. In fact, it is impossible to conceive the public worship of God being carried on in a building without the use of the land which it embraces within its walls, as it is impossible to conceive walls existing without the support, direct or indirect, of the soil of the earth. The conception of such things is not the less impossible because the legislature has by statute made the attempt fancifully to divide for the purpose of taxation concrete entities notionally into sections or portions which are presumably mutually exclusive and independent of each other. Their attempt will be abortive unless the language used be clear and plain. Should it not be so, one must judge by the meaning of the ordinary language used what is the nature of the thing to be dealt with as it is described in that language. To hold that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding' is not always limited to the structure itself, it sometimes includes the land on which the building stands, and the land within the enclosure belonging to the building and appropriate to its use . It is, therefore, obvious that the word building will have to be construed in the context of the statute in which it is used. In one context, as observed above, the building may include not only the land underneath it but the land which is necessary for its enjoyment; in the other context, it may not include the land which adjoins it but may include the land which is underneath it; and still in the other context it may not even include the land which is underneath it. It is this problem which has to be solved in the present case. In what context is the word building used in section 10(2)(vi)? As I have already said, building is placed at par with machinery and furniture and is treated as a unit. Depreciation is on building as a unit and not on parts of a building. What is an integral part of a building would be building whether it is bricks or wood or steel or land. For purposes of depreciation one cannot split up the building into what is building material and land. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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