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TMI Blog1982 (9) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... se, grant given by the Government is to be considered as a contribution by any other person or authority, or the assets acquired by the grant money, is a property of the assessee ? " M/s. Lucknow Producers' Co-operative Milk Union, Lucknow (briefly the assessee), is a co-operative society. The Government of Uttar Pradesh made a grant of Rs. 75,000 to the assessee by deed of grant dated December 17, 1963, for purchase of specific capital items such as vehicles, milk storage tanks, etc. The assessee acquired such capital assets with the help of this grant. While making assessment for the assessment year 1965-66, the ITO, inter alia, treated the grant of Rs. 75,000 as the assessee's income and subjected it to income-tax. The assessee preferr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hased with the aid of this grant. Explanation 2 to s. 43(1) of the Act reads thus: "Where an asset is acquired by the assessee by way of gift or inheritance, the actual cost of the asset to the assessee shall be the written down value thereof as in the case of the previous owner for the previous year in which the asset is so acquired or the market value thereof on the date of such acquisition, whichever is less. " We have carefully considered this Explanation and, in our opinion, it can have no application to the case of a grant or gift of money to the assessee. The term " asset " has not been defined in the Act. The Explanation concerns itself with gift of an asset which had a written down value in the hands of the previous owner, i. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly Co. Ltd. [1977] 109 ITR 545, in support of his contention that the term " authority " includes Government. In that decision it was observed (p. 549): "While under the old Act only the amounts received by the assessee from the Government or by any public or local authority could be deducted, under the present Act, the amounts paid to the assessee not only by the Government or by any public or local authority, but also by any other person should be deducted in computing the actual cost. " In that case the Division Bench was not called upon to decide the question whether the term " authority" in s. 43(1) of the Act includes Govt., and the above-quoted observation is only obiter. We have, therefore, to proceed to consider the point raise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... term " authority " has been used in s. 43(1) in its wider sense and would take within its ambit all constitutional, governmental or statutory authorities, which exercise power, whether original, delegated or derivative. Merely because the term " Government " has not been used in s. 43(1), while this term was used in, the Explanation to s. 10(5) of the Indian I.T. Act of 1922, it would not be reasonable to conclude that Parliament intended to exclude Government from the purview of s. 43(1). In the Explanation to s. 10(5) of the old Act, the words used were " by Government or by any public or local authority ". The word " authority " was qualified by the words public or local which were restrictive in nature. In s. 43(1), the restrictive word ..... X X X X Extracts X X X X X X X X Extracts X X X X
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