TMI Blog2001 (9) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... ft allowance, interest on loan taken, and investment allowance in relation to the tele typesetter owned by the assessee, but installed in the premises of its associate concern at Bombay, should be restricted only to a proportion thereof, by reason of the product of that machine being used by the assessee as also by its associate company. As regards the first question, that has to be answered in favour of the assessee, having regard to the decision of the Supreme Court in the case of Jonnalla Narashimha rao and Co. v. CIT [1993] 200 ITR 588. The law laid down therein, which concerns the assessment year 1968-69 would apply to the case on hand as well, the assessment year with which we are concerned being 1980-81, which is prior to the introdu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s court in the case of Indian Express (Madurai) P. Ltd. v. CIT [2000] 244 ITR 341. Learned counsel appearing for the Revenue, however, sought to contend that the liability for tax can be taken note of only in the year of payment and not earlier, notwithstanding the fact that section 43B was introduced in the statute book long after the end of the assessment year 1980-81. Learned counsel sought to derive support from certain observations of the Supreme Court in the case of K.C.P. Ltd. v. CIT [2000] 245 ITR 421. It was observed by the court therein that an amount which formed part of a trading receipt in the assessment year 1972-73 would be taxable in that year, notwithstanding the transfer of that amount to the sugar equalisation fund in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for business, etc., or not exclusively so used.--... (2) Where any building, machinery, plant or furniture is not exclusively used for the purposes of the business or profession, the deductions under sub-clause (ii) of clause (a) and clause (c) of section 30, clauses (i) and (ii) of section 31 and clause (ii) of sub-section (1) of section 32 shall be restricted to a fair proportionate part thereof which the Assessing Officer may determine, having regard to the user of such building, machinery, plant or furniture for the purposes of the business or profession." Sections 30, 31 and 32 uniformly use the expression "used for the purposes of the business or profession". By sub-section (2) of section 38, in order to claim full benefit of tho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, does not solely by reason of such benefit derived by a third party, render the expenditure incurred by the assessee, not exclusive for the purpose of its business or profession. So long as, from the point of view of the assessee, the expenditure incurred was an expenditure which in terms of commercial expediency was an expenditure which was required to be incurred for its business, such expenditure must be regarded as having been incurred exclusively for the purpose of the assessee's business even though incidentally a third party may also happen to be benefited by reason of such expenditure. The tele typesetter purchased by the assessee for a sum of Rs.26.39 lakhs during the accounting year relating to the assessment year 1980- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso used by the associate company for the purpose of publishing the Sunday Magazine does not on that score alone, render the user of this machine by the assessee non-exclusive for the purpose of section 38(2). The machine continues to be used exclusively for the busi ness of the assessee and not for any non-business or non-professional purpose of the assessee. The machine is used for bringing out a magazine, which is distributed along with the newspaper published by the assessee on Sundays. The machine is admittedly owned by the assessee and the assessee is the only entity, which is entitled to claim the benefits provided under sections 30 to 32. In this background, it cannot be said that the user of the machine is not exclusive for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it of depreciation and investment allowance cannot, as proposed by the Revenue, be reduced by half, since having regard to the nature of the user of the machine, depreciation is inevitable and the replacement of the machine at a later point of time would be necessary. The investment having been made by the assessee, investment allowance is properly claimable by the assessee and by none else. The expenditure incurred by the assessee by way of interest on loans obtained for funding the purchase of that machine is an expenditure which the assessee is required to meet and which expenditure it is entitled to claim as a deduction. As observed by the apex court in the case of Chandulal Keshavlal and Co. [1960] 38 ITR 601, the fact that a benefi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
