TMI Blog1981 (8) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... f. The petitioner-company filed objections to the proposal under s. 209(1) of the Nagar Mahapalika Adhiniyam, 1959, hereinafter referred to as "the Adhiniyam". The executive committee of the Nagar Mahapalika overruled those objections and, by its order dated February 25, 1972, determined the total value of the disputed buildings as, on the relevant date at Rs. 21,97,000 and its annual value at Rs. 95,989. Aggrieved, the petitioner-company filed an appeal under s. 472 of the Adhiniyam which was allowed by the judge, Small Causes Court, Allahabad, by his order dated December 17, 1974, fixing the annual value of the disputed property at Rs. 27,925. From that order the Nagar Mahapalika preferred an appeal which came up for hearing before the presiding officer of the Nagar Mahapalika Tribunal, Allahabad, who by his judgment and order dated June 2, 1975, allowed the appeal and fixed the annual value of the disputed property at Rs. 1,07,735.40. The present writ petition has been filed by the petitioner-company for quashing this decision and for restoring the decision given by the judge, Small Causes Court, Allahabad. A counter-affidavit has been filed on behalf of the respondent, Na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ahapalika so resolves, the annual value in the case of owner-occupied building and land shall, for the purposes of assessment of property taxes, be deemed to be 25 per cent. less than the annual value otherwise determined under this section. " Clause (a) of the above definition would be applicable to the building in dispute because it consists of factory and administrative offices of the petitioner-company. The definition of " annual value " given in this section is, in terms, akin to the definition of this expression given in s. 140 of the Municipalities Act, 1916. It will not be out of place to read that definition also. It reads as under : 140. Definition of annual value.-(1) 'Annual value' means, (a) In the case of railway stations, hostels, colleges, schools, hospitals, factories, and other such buildings, a proportion not exceeding five per centum, to be fixed by rule made in this behalf, of the sum obtained by adding the estimated present cost of erecting the building to the estimated value of the land appurtenant thereto, and (b) in the case of a building or land falling within the provision of clause (b), the gross annual rent for which such building, exclusive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the building itself and no hard and fast rule or formula can be laid down for assessing the depreciation. In the present case, the assessing authority did take into consideration the report of its engineer while proposing to increase the annual value of the disputed property to Rs. 95,989. The estimate of the total value of the building made by the Mahapalika's engineer did include the estimated value of the land appurtenant to the building. That record was made available to us for our perusal by the learned counsel for the respondent and we found that the contention of the petitioner-company to the contrary that the proposed estimate did not include the estimated value of the land appurtenant is not correct. An objection was raised before us by the learned counsel for the petitioner-company that we cannot peruse the record of the assessing authority, but we are not inclined to agree with him. Another grievance raised before us on behalf of the petitioner-company was that the material on which the estimate was based, was not disclosed to the petitioner. In this behalf we would like to observe that that material was certainly not confidential or previleged so that it could not ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for more than 15 years, depreciation has been calculated at 5 per cent. In doing so a reference has been made to s. 32 of the I.T. Act. We do not agree with the learned appellate court in this behalf because the considerations which weigh in allowing depreciation under s. 32 aforesaid are entirely different. We do not think it necessary to go into this aspect in great detail. Suffice it to say that the general scheme of the I.T. Act is that the income is to be charged regardless of the exhaustion or diminution, in the value of capital. An exception to this principle is afforded by s. 32 and before the benefit of this provision can be claimed there are numerous conditions which have to be fulfilled. The assets in respect of which depreciation allowance is claimed must be either buildings, machinery, plant or furniture. Depreciation is not allowable on the cost of the land on which a building is erected. The allowance is in respect of those buildings, machinery, plant and furniture which are used for the purposes of the assessee's business, the profits of which are being charged. The property should be owned by the assessee before depreciation allowance can be granted under s. 32(1) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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