Depreciation on agricultural land excluded where the statutory allowance covered only qualifying capital assets and works.

Depreciation under section 8(6) of the Maharashtra Agricultural Income-tax Act applies only to irrigation or protective works and other capital assets constructed or acquired for the land's benefit or for deriving agricultural income. It does not extend to the land itself, and "capital asset" in that provision cannot be read to include land. Rule 3 of the Maharashtra Agricultural Income-tax Rules only prescribes depreciation rates for assets within section 8(6); it does not create a separate allowance or widen the class of eligible assets. The residuary expression "other assets" in the rule cannot bring land within the depreciation scheme, so depreciation on land value was not allowable.

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Issues: Whether depreciation under section 8(6) of the Maharashtra Agricultural Income-tax Act, 1962 was allowable on the value of land cultivated by the assessee, and whether land could be treated as a capital asset or as an "other asset" under rule 3 of the Maharashtra Agricultural Income-tax Rules, 1962.

Analysis: Section 8(6) allows depreciation only in respect of irrigation or protective works or other capital assets constructed or acquired for the benefit of the land from which agricultural income is derived, or for the purpose of deriving such income. On a plain reading, the provision does not extend to the land itself, and the expression "capital asset" in that clause cannot be stretched to include land. Rule 3 merely prescribes the rates of depreciation for assets falling within section 8(6); it does not independently create a depreciation allowance or enlarge the class of eligible assets. The residuary expression "other assets" in the rule cannot cover land, which is outside the scope of section 8(6).

Conclusion: Depreciation on the value of land was not allowable, and the question was answered in the affirmative against the assessee and in favour of the Revenue.

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