Law:

Section:

Income Tax Ordinance, 1979 (XXXI of 1979)-- ----S. 136--Claim of depreciation of property--Head of Income--Assessee declared his income from three sources i.e. salary, private practice and lease amount of his hospital as well as the rental income from his property--Revenue had posed the question of law in such a manner that it seemed that the revenue authorities were themselves confused and were not sure that under what head the rental income should be treated--Tribunal treated it as income from the property had directed the assessing officer to allow depreciation--Order accordingly. Order The assessee is owner of property bearing Property No. 432-D, Peoples Colony, Faisalabad which is furnished with beds furniture and other professional instruments, rented it out with all the fixtures, furniture etc. at a monthly rent of Rs. 15,000/- 2. The assessee declared his income from profession, house property and salary. The Income Tax Officer did not allow during the assessment year, the claim of depreciation in respect of hospital as the same was not in use for business by the assessee himself. The show-cause notice was issued to the assessee that the business concern/hospital was leased on rent, the deductions claimed from rental income be disallowed. Vide order dated 10.09.1997, learned Tribunal directed the Assessing Officer to allow depreciation according to the relevant provisions of law. Through instant appeal following question of law was referred:- "Whether on facts and in the circumstances of the case, the learned Income Tax Appellate Tribunal was justified to hold that depreciation be allowed to the assessee whereas depreciation under Section 31 (1) (c) is only admissible when the condition precedent of the 3rd Schedule i.e. ownership of the assessee and use of the same for the purpose of business, profession or vocation carried out by the assessee are available?" 3. Before dilating upon the question of law, as framed above, we would like to refer to the relevant provisions of the repealed Ordinance : 19. Income from House Property:-- (1) The annual value of property shall be chargeable under the head "Income from house property". (2) For the purpose of…

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