Law:

Section:

Section 32(1)(ii) of the Income-tax Act, 1961, read with item (iii) of Part I of Appendix I of the Income-tax Rules, 1962 [as it stood prior to 1-4-1970] - Depreciation - Allowance/Rate of - Whether weeklies cannot come within terra 'newspaper' used in item (iii) of Part I of Appendix I notwithstanding the facts (i) that weeklies contain certain stray items of news value, (ii) that plant and machinery used for printing these weeklies are same or similar to plant and machinery used for producing newspapers, and (iii) that these weeklies have been registered as 'newspapers' under the Indian Post Office Act, 1898 and the Press and Registration of Books Act, 1867 - Held, yes Facts The assessees were producing certain weeklies. The Tribunal held that these weeklies were 'newspapers' and, thus, depreciation at the rate of 10 per cent was admissible on plant and machinery used in their production as provided under item (iii) of Part I of Appendix I of the Income-tax Rules, 1962 to 'newspaper production plant and machinery' and not at the general rate of 7 per cent. On reference at the instance of the revenue, the assessees, inter alia, contended (i) that the weeklies having been registered as 'newspapers' under the Indian Post Office Act, 1898 and the Press and Registration of Books Act, 1867, they should be taken to be newspapers for the purpose of allowance of depreciation, (ii) that even if the weeklies could not be taken to be newspapers, still, as they used substantially the same plant and machinery as had been used for the production of newspapers, they were also entitled to the special higher depreciation allowance, and (iii) that even otherwise, in so far as the contents of the weeklies were of considerable news value, they should be taken to come within the term 'newspaper'. There being a difference of opinion between the learned Judges the matter was referred to the third Judge under section 259(2). Held [Per Court] It is significant to note that neither the Income-tax Act, 1961 nor the Rules framed thereunder contain a definition of 'newspaper'. Therefore, the expression 'newspaper' has to be construed, not in any special or technical sense, but in a…

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