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TMI Blog1972 (6) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... JAM., V. RAMASWAMY. JUDGMENT The judgment of the court was delivered by RAMANUJAM J.- The following two questions have been referred under section 66(1) of the Income-tax Act by the Income-tax Appellate Tribunal, Madras: "(1) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that Smt. Rajeswari Vedachalam was entitled to claim depreciation under section 10(2)(vi) of the Income-tax Act, 1922, for the assessment year 1960-61 in respect of the assets used in the partnership business ? (2) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the assessee-firm was not entitled to claim depreciation under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been used for the purpose of its business, and that, therefore, the firm is not entitled to claim depreciation. The Appellate Assistant Commissioner also took the same view. The Income-tax Appellate Tribunal also agreed with the Income-tax Officer and the Appellate Assistant Commissioner and held that as the machinery and the assets in respect of which the depreciation was claimed were not the properties of the partnership, it is not entitled to claim depreciation. According to the Tribunal, before depreciation could be claimed under section 10(2)(vi) of the old Act or section 32(1) of the new Act, two conditions ought to be satisfied: (1) The machinery and the assets in respect of which depreciation is claimed should be the property of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the individual partner. Clause (3) of the partnership deed states that Smt. Rajeswari Vedachalam has taken in six persons as working partners to continue the existing business from April 11, 1957, and clause (4) specifically states that the working partners will have no right or claim in the partnership assets and that they are entitled only to a share in the profits or loss of the partnership business. The Tribunal has construed these clauses in the partnership deed and has come to the conclusion that Smt. Rajeswari Vedachalam continued to be the absolute owner of the assets and the machinery and that the partnership has only used the said machinery and the assets. But, we are unable to agree with the Tribunal in its interpretation of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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