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TMI Blog1962 (5) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... ee, Shri Sarveshwar Nath Nigam, manufactures kohlus and sanitary fittings, etc. Some of the kohlus along with pans, etc., are let out every year to agriculturists for the preparation of gur during the crushing season. In the course of assessment proceeding for the year ending 31st July, 1959, the assessee claimed depreciation for full twelve months for the kohlus let out on hire. The Income-tax Officer allowed depreciation only for four months in the year for which the kohlus had been actually let out, being of the opinion that proviso (2) to rule 8 of the Income-tax Rules did not apply to the case. On appeal by the assessee, the Appellate Assistant Commissioner held that the assessee was entitled to full depreciation for twelve months unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aken up by the department is correct. Since it is admitted that the hiring of kohlus is a part of the assessees business, section 10 would apply, as it relates to the assessment of the income from business, and not section 12 which refers to income from other sources . The decision in In re Sadhucharan Roy Chowdhry further supports this view. The question whether section 10 or section 12 applies is not of much importance so far as the question referred to us is concerned, as in both cases the depreciation claimed for the kohlus let out on hire is governed by the same provisions of law. Sub-section (2) of section 10 sets out the allowances that have to be made in computing the profits and gains of business, and the relevan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , we have to refer to rule 8 of the Indian Income-tax Rules 1922, which reads : The allowance under section 10(2)(vi) of the Act in respect of depreciation of buildings, machinery, plant or furniture shall be at percentages of the written down value or original cost, as the case may be, equal to one-twelfth the number shown in the corresponding entry in the second column of the following statement : Provided that if the buildings, machinery, plant or furniture have been used by the assessee in his business for not less than two months during the previous year, the percentage shall be increased proportionately according to the number of complete months of user by the assessee : Provided further that in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as no provision for allowing depreciation for a part of the year, and consequently where the machinery was used not for the entire year but for a part of it, depreciation had of it, depreciation had to be allowed for full twelve months. Arguing against resort to proviso (2), Shri Hardy has contended that it applied only to seasonal factory worked by the assessee , and it would not govern the present case as the kohlus were neither a factory nor were worked by the assessee himself. It is true that proviso (2) to rule 8 refers to a seasonal factory worked by the assessee , yet we do not find any justification for placing narrow construction on this expression. The word factory is not defined in the Income-tax Act, and in its popu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that kohlus, etc., which are meant for being used as sugarcane crushers, were let out for the entire crushing season. We agree with Shri Pathak that from the very nature of the business for which the kohlus were let out on hire it was impossible to put them to use for the entire year, and if the kohlus supplied lie idle and out of use for a part of the assessment year, not on account of any fault of the assessee but because of the seasonal nature of the business for which they are meant, it will be unreasonable to disallow depreciation for the period during which the kohlus were either under repairs of were being kept ready for use in the following season. Quoting from Maxwell on Interpretation of Statutes, page 229, tenth edition, and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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