TMI Blog2007 (11) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... titled to deduction under the said section. 3. The brief facts are as under: The assessee (hereinafter referred to as "the appellant" ) is a firm of Chartered Accountants in Ahmedabad. The Assessment relates to the Year 1984-85 for the financial year ending on 31.03.1984. During the relevant year the appellant constructed a building for the purpose of residence for its low paid employees and claimed initial depreciation @ 40% under Section 32(1)(iv) of the Act amounting to Rs.43,505/- on the actual cost of the building i.e. Rs.1,08,757/-. The Income Tax Officer (ITO) vide its order dated 15.1.1985 rejected the claim of the assessee-appellant on the ground that the said provision is applicable to an assessee carrying on "business" and the same is not available to a professional. 4. The Commissioner of Income Tax (Appeals) [for short CIT (A)] by its order dated 30.4.1985 reversed the order of the Income Tax Officer relying upon the judgment of this Court in Barendra Prasad Ray V. Income Tax Officer, 1981 (2) SCC 693, and allowed the claim of the appellant with the further direction to the Income Tax Officer to grant initial depreciation @ 40% for the building erected by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er than ships covered by clause (i), such percentage on the written down value thereof as may in any case or class of cases be prescribed: Provided that where the actual cost of any machinery or plant does not exceed [five thousand rupees], the actual cost thereof shall be allowed as a deduction in respect of the previous year in which such machinery or plant is first put to use by the assessee for the purposes of his business or profession; Provided further that no deduction shall be allowed under this clause or clause (iii) in respect of any motor car manufactured outside India, where such motor car is acquired by the assessee after the 28 th day of February, 1975, and is used otherwise than in a business of running it on hire for tourists; (iia) xxx xxx xxx (iii) xxx xxx xxx (iv) in the case of any building which has been newly erected after the 31 st day of March, 1961, where the building is used solely for the purpose of residence of persons employed in the business and the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the facts of the present case and the High Court has erred in distinguishing the same. 11. As against this Mr. V. Shekhar, learned senior counsel appearing for the Revenue, submits that Section 32(1)(iv) specifically refers to and meant for assessees who are in business. The same cannot be made applicable to professionals, as there is no reference in this sub-clause to the assessees who are in profession. According to him, the assessees who are carrying on profession would be deemed to be excluded by the Statute. That the assessees who are not in profession are entitled to the benefit of Section 32(1) of the Act which is meant for the assessees carrying on business only. According to the learned counsel, sub-section (1) of Section 32 lays down general conditions or basic requirements on fulfillment of which an assessee shall become eligible for deduction as provided in the various clauses which follow. That, from the scheme of the section various clauses would operate on further specific conditions laid down in each such individual clause(s). It is further submitted that though Section 32(1) refers to both "business" and "profession", the sub-sections, namely, (i) and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ness and profession are different and separate and they cannot be used interchangeably. It is a pointer to the fact that the Legislature under clause (iv) intended to restrict the benefit to the assessees carrying on business only. In sub-clause (ii) the legislature has specifically extended the benefit of depreciation to the assessees carrying on "business" as well as "profession" whereas in sub-section (iv), the legislature has restricted the benefit to the asseessees carrying on "business" only. 14. This Court rendered the decision in Barendra Prasad Ray's case (supra) in the context of Section 9(1), wherein the Court, after discussing the case laws, definitions, dictionary meanings, concluded as under: "The word "business" is one of wide import and it means an activity carried on continuously and systematically by a person by the application of his labour or skill with a view to earning an income. We are of the view that in the context in which the expression "business connection" is used in s.9(1) of the Act, there is no warrant for giving a restricted meaning to it excluding "professional connections" from its scope." 15. In Barendra Prasad Ray's case (supra), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, then the one in favour of the assessee should be adopted. But, we are of the view that in the present case two interpretations are not possible as the word "business" occurring in clause (iv) of Section 32(1), by no stretch of imagination, can be said to include "profession" as well. If the expression "business" is interpreted as including within its scope "profession", it would not mean that the lacuna has been made good by giving a wider interpretation to the word business. There is nothing in Section 32(1)(iv) which envisages the scope of word "business" to include in it "profession" as well. If the expression "business" is interpreted to include within its scope "profession" as well, it would be doing violence to the provisions of the Act. Such interpretation would amount to first creating an imaginative lacuna and then filling it up, which is not permissible in law. The contention of the counsel for the appellant that Section 32(1)(iv) should be given purposive interpretation to include "profession", has thus to be rejected. 19. For the foregoing reasons, we do not find any merit in the appeal and dismiss the same, leaving the parties to bear their own costs. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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