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TMI Blog1976 (10) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... was claimed before the Income-tax Officer was allowed Assistant a deduction under s. 35(2)(ia) for the immediately preceding assessment year 1973-74. The assessee claimed before the Income-tax Officer that irrespective of this hundred per cent deduction in the earlier year, the assessee was entitled to depreciation allowance for and from the succeeding year on the cost of those assets, because s.35(2)(iv) barred this allowance only in respect of the assessment year for which the deduction was made under s. 35(2)(ia) but not for subsequent years. The Income-tax Officer rejected the assessee's claim inspite of the Tribunal's decision in the assessee's favour in I.T.A.No.1621(BOM)/72-73 in the case of M/s Himco Products P. Ltd.(of which a copy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct of any expenditure of capital nature on scientific research related of the business carried on by the assessee. According to him there was a clear distinction between the assets" used for the purpose of the business" and assets "utilised in scientific research related to the business". He held that an asset could not simultaneously be used for the business and also for scientific research related to business. (iii) The definition of scientific research Assistant given in s. 43(4)was very wide indeed and assets used for such scientific research could not be said to be used for purpose of the business of the appellant. (iv) The very wording of s. 35(2)(v) indicated the intention of the Legislature to grant depreciation on assets used f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch and scientific research is thus closely connected with the actual business being carried on. There is nothing in the Act to suggest that ss.33 and 35 are exclusive and that if allowance or deduction is given under one section it would be denied under the other. If it were the intention of the Legislature to document so nothing could have been easier than to say in s.35 (2)(iv) itself that if an allowance was made under s.35, the assessee would not be entitled to depreciation allowance for any year including the previous year for which deduction is made under s.32. The Legislature in its wisdom has merely provided that depreciation allowance will not be given in the year in which deduction is given under s.35 and nothing more. Nothing can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only because it was compelled to leave it sold business premises and to go to Deonar, which was very inconvenient. It was also pointed out that the shifting was not done with an idea of any expansion programme or for getting any better advantage, but that the whole thing Assistant compelled on the assessee as Tata Oil Mills Ltd. Required the old premises for their own business. It was also urged that this shifting did not bring in any enduring advantage to the assessee nor was there any improvement in the profit making machinery. He was, therefore, requested to allow the expenditure. The Appellate Assistant Commissioner did not agree with the assessee and he held Assistant under: "Admittedly the expenses have not been incurred for making ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nses should in every case be considered Assistant capital expenditure. We are in fact aware that in another High Court decision shifting expenses have been allowed Assistant revenue expenditure, though we cannot readily lay our hands thereon, nor has the assessee brought that decision to our notice. The facts on record indicate that the assessee which was carrying on business in a convenient locality had necessarily to shift to a much distant place like Deonar only because Tata Oil Mills Ltd. wanted the premises for its own use. The factory was shifted to a less convenient place not because of any intended expansion programme nor for any greater advantage but only because the assessee could not stick to its old place. By shifting the factor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b)were satisfied. In view of this new subsection, which became operative for the year under appeal, the Appellate Assistant Commissioner rejected the assessee's claim by stating that the conditions laid down therein were not complied with by the assessee, but adding that if in future they were complied with, the assessee could resort to other remedial measure provided in the Act. 8. It is common ground before us that the assessee did not make any attempt even thereafter to fulfil the conditions laid down by s.40A(7). As such we have necessarily to agreed with the Revenue that the provision for gratuity amounting to Rs..... cannot Bombay Act 1959 allowed to the assessee. 9. The last ground is to the effect that Appellate Assistant Commis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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