TMI Blog1995 (12) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... this reference, are that the assessee is a M. P. State Government company incorporated under the Companies Act, 1956. The assessment year involved is 1979-80, the accounting period being from April 1, 1978, to March 31, 1979. For providing residences to persons employed in its business, the assessee claimed to have purchased from the M.P. Housing Board, Bhopal, residential quarters at a cost of Rs. 9,57,924 under a hire purchase agreement and claimed an initial depreciation at the rate of 40 per cent. and amounting to Rs. 3,83,170 under section 32(1)(iv) of the Income-tax Act, 1961. The Income-tax Officer refused the initial depreciation under section 32(1)(iv) of the Income-tax Act, 1961, and on appeal the same was affirmed and likewise i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gistered firm, in the assessment of its partners), full effect cannot be given to any allowance under clause (ii) of sub-section (1) in any previous year, owing to there being no profits or gains chargeable for that previous year, or owing to the profits or gains chargeable being less than the allowance, then, subject to the provisions of sub-section (2) of section 72 and sub-section (3) of section 73, the allowance or part of the allowance to which effect has not been given, as the case may be, shall be added to the amount of the allowance for depreciation for the following previous year and deemed to be part of that allowance, or if there is no such allowance for that previous year, be deemed to be the allowance for that previous year, an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of erection of the building, and then only the assessee will be entitled to forty per cent. initial depreciation of the actual cost of the building. Now, we have to examine the factual part, as to in this case whether the Tribunal had rightly denied the benefit of initial depreciation, to the applicant, under section 32(1)(iv) of the Act or not ? In this case, it is relevant to mention here that under section 32(1), (2) depreciation is also granted and in the present case, the assessing authority has granted depreciation as is apparent from the assessment order, to the tune of Rs. 6,90,121. Therefore, so far as the fact of ownership is concerned that is well established that the assessee has been granted a depreciation treating this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this view taken by the Tribunal is also not correct. Similarly, it was stated in the statement of the case that these houses were given to the persons who were employees of the assessee, drawing less than ten thousand rupees. Therefore, it cannot be said that the houses were given to the persons whose salaries were more than ten thousand rupees. Though the Tribunal has observed that whether the houses were constructed by the assessee or the houses have been taken by the assessee, who was the hire purchaser, will be treated to be the owner or not, but the Tribunal has not expressed any opinion, therefore, we need not dilate on this subject. Suffice it to say that it was a new building constructed by the Housing Board in the previous year an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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