Law: Income Tax Act, 1922

Section: 66

Income Tax Rules-Rule 8 (2), CI. III (3) M - Depreciation - Machinery and plant-Assessee printing the Holy Quran and other books of religion-Depreciation at the rate of 10 per cent, whether permissible under clause III (3) M on the basis of use of plant and machinery and not on basis of its use for a particular purpose or by a particular concern-Held yes. The assessee was engaged in the printing of the Holy Quran and other books of religion. Depreciation for the use of plant and machinery was allowed by the Income-tax officer at the rate o per can u clause III (1) of rule 8 (2) of the Income-tax Rules as against 10 per cent claimed by the assessee under clause III (3) of the said rules. The Tribunal affirmed the treatment meted out by the Income-tax Officer. The High Court, revising the order of the Tribunal, allowed the claim at 10 per cent under clause III (3) M of rule 8 (2) of the aforesaid rules. The Supreme Court upholding the view taken the High Court; Held that:- (i) Clause III (1) has not application in the instant case as its application is excluded by the specific clause III (3) M which applies in the instant case; (ii) Clause III (2) too has no application as it applied to particular type of machinery and plant used in particular concerns mentioned in the clause. Newspaper production plant and machinery is not at all mentioned in this sub-clause; and (iii) So far as clause III (3) is concerned it applied to machinery and plant and not to concern. Newspaper production plant and machinery is mentioned at item No. M under this sub-clause and the manner in which the machinery is to be used or the concern which has to use it is not all mentioned. The depreciation under this clause has, therefore, to be allowed on the basis of the use of the plant and not on the basis of its use for a particular purpose or by a particular concern, The respondent was, therefore, evidently entitled to deprecation at the rate of 10 per cent under this clause III (3) M. ORDER [The Judgement of the Court was delivered by QAISAR KHAN, J]. Messrs Taj Company Limited, Railway Road, Lahore, respondent in this appeal is a concern engaged in the printing of the Holy Quran and other…

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