Law: Income Tax Act, 1922

Section: 10,10(2)(vi),(a),(aa),(b)

Income-tax Act, 1922 (XI of 1922)-Section 10(2) (vi), (a), (aa), (b) Depreciation-Building erection of which is begun and completed between 1-4-1946 and 30.6-1975-Building not meant for residence of industrial labour- Whether covered by sub-clauses (aa) and (b) of section 10(2)(vi)-Held no. JUDGMENT [THE JUDGMENT OF THE COURT was DELIVERED MUSHTAQ HUSSAIN J]--Messrs Colony Textile Mills LTD., Lahore, a public limited company, engaged in the manufacture of textile, submitted its returns for the assessment year 1957-58 and being aggrieved by the order of the Income Tax Officer filed a direct appeal which was disposed of by the Income Tax Appellate Tribunal of 27th of May, 1969. 2. The mutter in controversy before the Tribunal included the question whether rate of the depreciation in respect of certain buildings permissible under the law was to 10 per cent or 15 per cent. The Tribunal has already found in I.T.A No. 491 of 1963-64 dated 20th of October, 1964 that 15 per cent was the correct rate to be applied in such circumstances. The Tribunal, therefore, accepted the appeal to this extent and directed the Income Tax Officer to revise the depreciation allowed in accordance with this decision. 3. An application presented by the Commissioner of Income-tax for a reference to the High Court resulted in the Tribunal referring only one question to us for opinion, which is as follows:- "Whether on the facts and in the circumstances of the case the Tribunal was justified in granting depreciation under section 10(2) (vi)(a) to buildings not covered by explanation to sub-clause (aa)?" 4. Our answer is in the affirmative and our reasons follow. 5. Section 10 of the Income-tax Act deals with profits and gains of business, profession or vocation. Subsection (2) provides for making allowances therein before computing such profits and gains, Sub-section 2(vi) deals with depreciation in respect of buildings. and the rate of depreciation to be allowed in such computation is given in sub-clauses (a) (aa) and (b) etc. Sub-clauses to (b) run as follows: "(a) In the case of buildings, other than buildings referred to in sub-clause (aa) and sub-clause (b) the erection of which is begun…

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