9911796707
TMI Blog2017 (2) TMI 1092X X X X Extracts X X X X X X X X Extracts X X X X ..... . 2006-07. ITA No. 2211/Ahd/2012 is the appeal by the revenue preferred against the order of the ld. CIT(A)-XIV, Ahmedabad dated 10.07.2012 pertaining to A.Y. 2009-10 and ITA No. 1885/Ahd/2013 is the appeal by the revenue against the order of the ld. CIT(A)-XIV, Ahmedabad dated 25.04.2014 pertaining to A.Y. 2010- 11. 2. As common issues are involved in all these appeals, these were heard together and are disposed of by this common order for the sake of convenience. 3. The contentious issues relate to the taxability of the lease rental income under the head "Profits and gains of business or profession" or under the head "Income from other sources". The issues relating to the allowability of depreciation, additional depreciation, set off of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Rules. 7. The assessee company is engaged in the business of manufacturing of fabrics on job work basis. During the previous year 2005-06, the assessee company has leased out its entire unit i.e. Factory Building, other erections and Plant and Machinery and all other fixtures and fittings, etc. to Arvind Mills Ltd. with effect from 01.10.2005 for a period of 8 years at monthly rent of Rs. 8.33 lacs. Prior to this, the assessee was engaged in the business of manufacturing of fabrics on job work basis. In A.Y. 2006-07, the A.O. treated the lease rental income chargeable to tax under the head "Income from other sources" u/s. 56(2)(iii) and not as business income. In subsequent years, which are also under appeal before us, the assessee itse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usiness or profession". 12. We find that Under Clauses (ii) and (iii) of Section 57 in cases of income arising out of hiring of machinery, plant and furniture, the Legislature intended to confer the same benefit on the same terms as was available in respect of income under the head "Profits and gains of business or profession" on account of certain specified items of expenditure or deduction. The scheme appeared to be not to allow all deductions available for computing the income under the head "Profits and gains of business or profession" in respect of income arising out of letting out of plant, machinery and furniture but to allow deductions under certain specified heads which had a direct relationship with plant, machinery, etc. The ded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tory provision which is plain and unambiguous. A statute is the edict of the Legislature. The language employed in a statute is the determinative factor of legislative intent. The first and primary rule of construction is that the intention of the legislation must be found in the words used by the Legislature itself. The court only interprets the law and cannot legislate. If a provision of law is misused and subjected to the abuse of the process of law, it is for the Legislature to amend, modify or repeal it, if deemed necessary. Legislative casus omissus cannot be supplied by judicial interpretative process." 15. The Hon'ble Supreme Court in the case of Hindustan Bulk Carriers 259 ITR 449 PP 465 has held "The provision of one section of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so far as current depreciation was concerned irrespective of the fact whether the assets were yielding income under the head "Profits and gains of business or profession" or "Income from other sources". The depreciation should be calculated at the prescribed percentage of the written down value of the assets. The prescribed percentage was the same whether the income arose under the head "Profits and gains of business or profession" or "Income from other sources". 20. The expression "written down value" was defined in Section 43(6) of the Act and in the case of assets acquired before the previous years meant the actual cost to the assessee of the said assets less all depreciation actually allowed to him under this Act or the earlier Act or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wing the same from the head "Profits and gains of business or profession". 25. We find that in A.Y. 2006-06, the assessee has done the business for some part of the year which income has been taxed under the head "Profits and gains of business or profession". In our considered opinion, the interest should have been allowed on pro rata basis. We accordingly direct the A.O. to deduct interest proportionately from the income taxed under the head "Profits and gains of business or profession" and "Income from other sources". We hold accordingly. 26. For the similar reasons the depreciation need to be bifurcated proportionately in A.Y. 2006-07 between the heads "Profits and gains of business or profession" and "Income from other sources". 27. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
