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of <h1>Court rules land not depreciable under Maharashtra Agricultural Income-tax Act, denying assessee's claim.</h1> <h3>Maharashtra State Farming Corporation Ltd. Versus State Of Maharashtra</h3> The High Court of Bombay ruled that depreciation is not allowable on land cultivated by the assessee under section 8(6) of the Maharashtra Agricultural ... Agricultural Income Tax, Depreciation Issues:- Allowability of depreciation on the value of land cultivated by the assessee under section 8(6) of the Maharashtra Agricultural Income-tax Act, 1962.Analysis:The judgment delivered by the High Court of Bombay pertains to references under section 39(1) of the Maharashtra Agricultural Income-tax Act, 1962, where the Maharashtra Sales Tax Tribunal referred a question of law regarding the allowance of depreciation on the value of land cultivated by the assessee for the court's opinion. The assessee, a company formed to undertake cultivation of surplus land, challenged the Tribunal's decision denying depreciation on the land cultivated by them for the assessment years 1974-75 to 1978-79. The court examined section 8 of the Act, specifically clause (6) which allows depreciation for assets acquired for the benefit of the land from which agricultural income is derived. The court emphasized that depreciation is only applicable to assets, not the land itself, as per the clear language of the provision. The court rejected the assessee's argument that land should be considered a capital asset eligible for depreciation under clause (6) of section 8.The court also addressed the alternate argument presented by the assessee, suggesting that 'land' could be considered under the residuary item of capital assets in the Maharashtra Agricultural Income-tax Rules, 1962. However, the court clarified that the rules only prescribe rates for depreciation allowances under section 8(6) of the Act and do not encompass assets like land. The court reaffirmed that land does not qualify as a capital asset under the relevant clause. Consequently, the court answered the question referred to them in the affirmative, ruling against the assessee and in favor of the Revenue. The references were disposed of accordingly, with no orders as to costs, concluding the judgment delivered by the High Court of Bombay.
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