TaxTMI 
TaxTMI 
2000 (8) TMI 40
X X X X Extracts X X X X
X X X X Extracts X X X X
....any, which was incorporated on August 19, 1965, for manufacturing Nylon-6 yarn. However, the production started in 1968. The previous year relevant for the assessment year, as noted above is from March 1, 1968, to February 28, 1969. In the return of income filed, the assessee claimed initial depreciation of Rs. 4,34,774 for the quarters constructed at a cost of Rs. 21,73,872 as under : Tupes of Qrs. Nos of Qrs. Total cost Rs. B Type 66 6,38,064 C Type 252 &....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ere constructed for the senior employees, the quarters which were in their occupation during the assessment year concerned, were vacated for the purpose of allotment to junior employees. As such depreciation in respect of B, C and D type quarters were liable to be granted and, accordingly, he directed the Income-tax Officer to allow initial depreciation equivalent to 20 per cent. of the cost of quarters. The matter was carried in further appeal before the Tribunal by both---the assessee and the Revenue---on several grounds. The present reference relates to the appeal filed by the Revenue. The only point which was taken up by the Revenue in the appeal filed by it related to a direction of the Appellate Assistant Commissioner to allow initial depreciation. The Tribunal was of the view that as the language used in section 32(1)(iv) was clear, there was no scope for taking note of practical difficulties and making a consideration on equitable grounds. It was held that the language of the provision being clear, the order of the Appellate Assistant Commissioner was not sustainable. Accordingly, the order of the Income-tax Officer was restored. The assessee's reference under section 256(....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o be granted only once, in respect of the previous year of erection of the building. On a plain reading of the provision, it is clear that in order to be entitled to depreciation, certain conditions were to be fulfilled. They are as follows : (a) the building must have been newly constructed after March 31, 1961 ; (b) the building must be used solely for the purpose of residence of persons employed in the business ; (e) the income of such persons chargeable under the head "Salaries" must be Rs. 7,500 or less annually. The provision also deals with other types of user of the building. Where such building is either solely or mainly used for the welfare of such persons, employed in the business, as hospital, creche, school, canteen, library, recreational centre and lunch room, depreciation is also allowable. In both the types of cases at the relevant time a sum equal to 20 per cent. of the actual cost of the building was allowable in respect of the previous year of the erection of the building. But it was stipulated that no such sum shall be deducted in determining the written down value for the purposes of clause (ii) of section 32(1). It is to be noted that in the two types of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ee Micklethwait, In re [1855] 11 Ex. 452 ; Tennant v. Smith [1892] AC 150 (HL) and Saraswati Sugar Mills v. Haryana State Board, AIR 1992 SC 224). In a classic passage, Lord Cairns stated that "if the person sought to be taxed comes within the letter of the law, he must be taxed however great the hardship may appear to the judicial mind to be" (see Partington v. Attorney-General [1869] LR 4 (HL) 100, referred to in J. K Steel, Ltd. v. Union of India [1970] AIR 1970 SC 1173 and Ransom (Inspector of Taxes) v. Higgs [1974] 3 All ER 949 (HL)). It is trite law that a taxing statute has to be strictly construed and nothing can be read into it. In the classic passage from Cape Brandy Syndicate v. IRC [1921] 1 KB 64, it was said : "In a taxing Act one has to look merely at what is clearly said. There is no room for any intendment, There is no equity about a tax. There is no presumption as to la tax. Nothing is to be read in, nothing is to be implied. One can look fairly at the language used." This view has been reiterated by the apex court time and again. Thus, in State of Bombay V. Automobile and Agricultural Industries Corporation [1961] 12 STC 122 (SC), it was observed as follows : ....