TMI Blog1988 (3) TMI 115X X X X Extracts X X X X X X X X Extracts X X X X ..... ssar District, Haryana, a middle school was being run by the State Government. This was in a backward area. The upgradation of this institution was in the offing. The building was on the Government land. Adjoining thereto, there was 6-acre of open plot of land belonging to Gram Panchayat. The Gram Panchayat was willing to hand over the plot to the middle school, the upgradation of which was under consideration. It is at that stage the assessee proposed not only to renovate the existing building but to put up extension and provide all furniture, fittings, etc., as per the approved plan of the State Government. Even a playground had to be formed. 4. The assessee proposed to the Government to develop the building in the manner required of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nted depreciation on the figure he had fixed as its cost. The assessee succeeded before the CIT(A). The revenue is in appeal objecting to the relief given by the CIT(A). 6. There is no dispute that the development programme embarked upon by the assessee was one to which deduction under section 35CC(1) was allowable and the Commissioner of Income-tax, Rohtak, had too granted, approval in this regard. So far as the cost is concerned, the finding of the CIT(A) remains intact since no specific ground is raised. The only point on which argument was addressed was that the assessee had not divested itself of ownership of the asset created by the expenditure incurred. In a sense the argument proceeded on the assumption that the asset created was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he whole completed building to the Education Department to run the school. But for the specific permission granted to constructing the school building, the act would have been unlawful. The assessee was no more than a licensee to enter upon the land to undertake development work. The object is to complete the development programme by renovation, construction, etc., and when this purpose is over, the permission ceased to be in operation. So, this was a case where licence got revoked the moment the purpose for which it was granted was fulfilled -- see section 62(f) of the Easements Act. 9. An asset may be acquired or brought into existence during the course of a rural programme contemplated under section 35CC in a variety of manners. In a g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the asset should be for the benefit of the middle school which the State Government was running and the upgradation of which was in its mind. Therefore, even from the moment the amounts left the till of the assessee, it partook the character of donation and there was a change in the complexion then alone. The payments in this case were in truth payments of donation. As a matter of fact, the assessee has completed development programme and delivered back possession of the school building to the State Government. 11. Take the case of renovation or playground formed. The old building and the open space were assets of State Government/Gram Panchayat. It can hardly be said that improving old school building or forming the playground produced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther companies were having some difficulty in unloading of its goods at the railway siding. Negotiations were made with the railways who agreed to provide facility by constructing a proper platform along the railway siding at Hissar. The railway authorities, however, insisted that in order to provide the requisite facility, the assessee and the other two companies should bear the cost of construction of the platform and the other facilities to be provided. The three companies agreed. As per the share of the assessee-company, the payment of Rs. 56,570 had been made in this accounting year to the railways. This expenditure was hold to be in the capital field by the IAC but the CIT(A) disagreed and, following the decision of the Tribunal in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court in the case of CIT v. Sadul Textiles Ltd. [1987] 167 ITR 634. First, it cannot be said that limitation has run out merely because the origin of the liability is beyond three years. Assuming for argument sake that limitation has run out, it only bars the remedy in a court of law but the liability as such is not wiped out. This is not a case where there has been a cessation or remission of liability or abandonment of the claim by the creditor Sadul Textiles Ltd.'s case is in point. The finding of the CIT(A) is in order and we affirm the same. 17. In the appeal for 1983-84, the first ground relating to s. 35CC has already been dealt with and for the reasons given, we reject the first ground. 18. The second ground is in the alter ..... X X X X Extracts X X X X X X X X Extracts X X X X
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