TMI Blog1990 (11) TMI 87X X X X Extracts X X X X X X X X Extracts X X X X ..... By G. O. Ms. No. 1899, dated August 24, 1970, three raw material depots at Guindy, Madurai and Coimbatore were transferred by the Government of Tamil Nadu to the control of the assessee for ₹ 59,74,000. The sale consideration was adjusted as under : Rs. Subscription of share capital by the Government to the appellant 50,00,000 Grant of loan by the Government to the appellant 9,74,000 -------------------- 59,74,000 -------------------- The Income-tax Officer disallowed the claim for depreciation on the ground that the ownership of the properties referred to above was not transferred in favour of the assessee by registered documents. On appeal, the Appellate Assistant Commissioner held that the ownership of the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assets with a view to mitigating the rigour of the general scheme of the Act subjecting income to charge, regardless of the exhaustion of or diminution in the value of the capital asset. As pointed out by this court in the decision, CIT v. Tamil Nadu Agro Industries Corporation Ltd. [1987] 163 ITR 61, to which one of us is a party (Ratnam J.), in order to enable the assessee to claim the benefit of depreciation, the following conditions should be fulfilled: (i) the assets in respect of which the depreciation is claimed should be buildings, machinery, plant or furniture, (ii) the assets must have been used for purposes of the assessee's business the profits of which are being charged ; (iii) the assessee must be the owner of the buildin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grants and it will not cover a sale for consideration. We are unable to accept the above contention of learned counsel for the Revenue. Section 2 of the Government Grants Act, 1895, reads as follows: Transfer of Property Act, 1882, not to apply to Government grants. - Nothing contained in the Transfer of Property Act, 1882, shall apply or be deemed ever to have applied to any grant or other transfer of land or of any interest therein heretofore made or hereafter to be made by or on behalf of the Government to, or in favour of, any person whomsoever ; but every such grant and transfer shall be construed and take effect as if the said Act had not been passed. A plain reading of section 2 of the Government Grants Act, 1895, reproduced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 's suggestion that the Act is confined to the transfer of prerogative rights possessed by the Crown and not to ordinary incidence of a mercantile transaction in which the Crown may be engaged is opposed to the plain language of the statute. In Champa Lal v. Rameshwar, AIR 1967 Raj 233, the Rajasthan High Court, while rejecting the contention raised in that case that section 2 of the Government Grants Act, 1895, is not applicable to the sale deed as it is a commercial transaction and not a Government grant, held that the Government Grants Act, 1895, does not make any distinction between commercial transaction and a non-commercial transaction and that section 2 of the said Act is applicable not only to grants but is also applicable t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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