Part-year ownership does not justify proportionate reduction of depreciation where the statute contains no express apportionment rule.

Depreciation under Section 10(2)(vi) was analysed as a statutory allowance tied to business use of buildings, machinery, plant or furniture, with no general basis for reducing it merely because ownership or use covered only part of the accounting year. The note distinguishes this from the specific apportionment and adjustment provisions for sold assets and for assets not wholly used for business purposes. On that reasoning, part-year ownership or use alone does not justify proportionate disallowance of depreciation, and equitable considerations cannot override the statutory allowance.

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Issues: Whether the assessee was entitled to the full amount of depreciation under Section 10(2)(vi) of the Income-tax Act irrespective of the period for which the machinery and building were owned or used during the accounting year.

Analysis: Section 10(2)(vi) allowed depreciation on buildings, machinery, plant or furniture used for the purposes of the business. The Act contained a specific adjustment in Section 10(2)(vii) where machinery or plant was sold during the year, and Section 10(3) provided apportionment only where the asset was not wholly used for business purposes. From these provisions, no general rule could be inferred for proportionately reducing depreciation merely because ownership or user continued for only part of the year. The assessee had owned and used the assets for the relevant accounting period, and taxation law did not permit the introduction of equitable considerations to deny the statutory allowance.

Conclusion: The assessee was entitled to full depreciation and the question was answered in the affirmative, in favour of the assessee.

Final Conclusion: The reference was answered by holding that depreciation could not be apportioned merely on the ground that the assets were transferred during the accounting year.

Ratio Decidendi: Depreciation under the income-tax law is allowable according to the statutory conditions expressed in the Act, and in the absence of an express provision authorising proportionate reduction for part-year ownership or use, no such apportionment can be made.

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