1997 (9) TMI 14

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....a brochure regarding the enterprises of the Murugappa group. The Tribunal has rejected the claim for depreciation on the sole ground that the amount claimed as depreciation is equivalent to the cost of acquisition of the assest. The fact that a pedestal fan was purchased and used for the purpose of the business of the assessee has not disputed by the Revenue. Section 5(f) of the Tamil Nadu Agricultural Income-tax Act, 1955, deals with depreciation. That provision reads as under: "5. (f) In respect of depreciation of buildings, machinery, plant and furniture which are the property of the assessee and are required for the purpose of deriving the agricultural income, a sum equivalent to such percentage on the written down value thereo....

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....ce, is manifest from the reference in the rule to the "rates prescribed from time to time." The intention obviously was to adopt the prevailing rates of the depreciation permitted under the Central income-tax law in force, for determining the amount of deduction which could be allowed to the assessee under the State Act from its agricultural income, under the head "Depreciation". It must, therefore, be held that though rule 4(1) refers to the Indian Income-tax Act, 1922, it must now be read as having reference to the Income-tax Act, 1961. The Income-tax Act, 1961, is an Act which was enacted to "consolidate and amend the law relating to income-tax and super tax" and by section 297 of that Act the Indian Income-tax Act, 1922, was repealed....

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....would include the allowance of 100 per cent. as depreciation if so allowed under the Indian Income-tax Act. The rate can vary from zero to 100 per cent. This is recognised in section 5(f) of the State Act where the third proviso states that the deduction shall not exceed the original cost of the building, machinery plant and furniture. If the deduction of 100 per cent. is allowed in the very first year, in respect of some items, that does not make it any the less a deduction for depreciation. The whole topic of depreciation as dealt with in the Indian Income-tax Act has been engrafted to the State Act "for the purpose of determining the deduction allowable under the head 'Depreciation'" from the agricultural income of the assessee except to....