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TMI Blog1972 (6) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... t from the firm, New Taj Mahal Hotel, Hyderabad, the depreciation on the building owned by the assessee in which the business of the firm was run was an admissible deduction - - - - - Dated:- 23-6-1972 - Judge(s) : ALLADI KUPPUSWAMI., SRIRAMULU. JUDGMENT The judgment of the court was delivered by ALLADI KUPPUSWAMI J.- The assessee, Janaki Bai, and her minor son, Vaman Rao, together own a building in Hyderabad. They are also partners in the firm, M/s. New Taj Mahal Hotel, Sultan Bazar, Hyderabad, along with one Narayana Bhat. The assessee holds 37 1/2% share and the minor son holds another 37 1/2% share in the said business. The hotel is being run in the premises belonging to the assessee and her minor son. The total share income o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case is covered by the provisions of the Income-tax Act, 1961. The depreciation is claimed under section 32 of the Act, which provides for depreciation in respect of buildings, machinery, plant or furniture owned by the assessee and used for the purpose of the business or profession. Apart from this there is also a general provision under section 37, under which any expenditure (not being the expenditure of the nature described in sections 30 to 36 and not being in the nature of capital expenditure or personal expenses of the assessee) laid out or expended wholly and exclusively for the purposes of the business or profession shall be allowed in computing the income chargeable under the head " Profits and gains of business or professio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r for the purpose of earning profits from the partnership business, the assessee would be entitled in his individual assessment to claim deduction of the amount under section 10(2)(xv) of the Income-tax Act or under the general principles. In the light of these decisions and other decisions which took a similar view, Sri Rama Rao, standing counsel for the department, conceded that the depreciation on the building of the assessee used for the purpose of business of the firm, of which she was a partner could be allowed as a permissible deduction under the Indian Income-tax Act, 1922, but he submitted that the position under the Act of 1961 is different. Though the latter Act contains provisions similar to sections 10(2)(vi) and 10(2)(xv) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is true, section 67 refers to the method of computing a partner's share and section 67(3) provides for deduction of interest paid by a partner on capital. The section, however, does not provide that any other deduction is not permissible. We do not find anything in the Act which will also imply that deductions under sections 30 to 37 are not permissible in the case of a partner's share in the income of the firm. On the other hand, a perusal of the legislative history of this section leads to a contrary conclusion. In the twelfth report of the Law Commission of India, which deals with revision of the Indian Income-tax Act of 1922, the clause corresponding to section 67(3) was clause 69(3) which was as follows : " Any interest paid by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 37(1) of the Act. The Rajasthan High Court also has taken the same view in Commissioner of Income-tax v. Jabarmal Dugar. It was held that if a deduction could be claimed under any other provision of the Act, that right would not be taken away merely by the provisions of section 67(3) of the Act. In that case it was held that the expenses incurred on account of salaries of the accountant and other employees of one of the partners were expenses incurred wholly and exclusively for the purpose of earning income from the business of the firm, of which he was a partner and can be allowed as a deduction. In Matubai Chunilal Patel v. Commissioner of Income-tax it was held that motor expenses including depreciation could be deducted in computi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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