ADDITIONAL COMMISSIONER OF INCOME TAX Vs. PUNJAB NATIONAL BANK
LAWS(DLH)-1983-1-26
HIGH COURT OF DELHI
Decided on January 07,1983

COMMISSIONER OF INCOME TAX Appellant
VERSUS
PUNJAB NATIONAL BANK LTD. Respondents




JUDGEMENT

D.K.KAPUR, J. - (1.)A number of IT references have been heard by us in which the assessee concerned is the Punjab National Bank. In some of the assessment years under consideration, the original assessee was the Punjab National Bank Ltd. before its nationalisation. Since many of the points are common, it will be more convenient to deal with the references in chronological order. There are seven references in all which relate to the asst. yrs. 1960 -61 to 1965 -66, i.e., six different assessment years, There are to references relating to the asst. year 1963 -64. In this judgment the asst. year 1960 -61 is under consideration, the number of the relevant reference being IT Ref. No. 104 of 1972.
(2.)THE following question have been referred to us in relation to this year :
" 1. Whether, on the facts and in the circumstances of the case, the assessee was entitled in determining its business profits to proportionate depreciation in respect of that portion of the building which was let -out to tenants and income from which was determined under S. 9 of the IT Act, 1922 ?

2. Whether, on the facts and in the circumstances of the case, the assessee was entitled to proportionate depreciation in respect of lifts and air -conditioning plant insofar as they related to the portion of the property which was let out to tenants and income from which was chargeable under s. 9 of the IT Act, 1922 ?

3. Whether, on the facts and in the circumstances of the case, the assessee was entitled to development rebate in respect of lifts and air -conditioning plants fixed in the building, a portion of which was let out to events and income form which portion was chargeable to tax under S. 9 of the IT Act, 1922 -

The three question have arisen in relation to the property of the Bank situated in Parliament Street, New Delhi, Five out of six floors in this building were used in the year under consideration by the assessee for its own business, but one floor was let out to a client. We understand that this was the Head Office of the Bank and the six the floor which was let out was occupied by another party whose management had some connection with the management of the Bank. This fact does not make any difference to the legal position of this case, but this fact was disclosed by learnedd. counsel for the assessee to explain how it happened that a portion of the Head Office was let out to some other party.

(3.)THE whole buildings is fitted with air -conditioning equipment's and there are also lifts operating. The questions which have arisen in relation to the building, the air -conditioning plant and the lifts in the building are inter -connected. The first question referred to us is concerned with the manner in which depreciation on the whole building has to be calculated for the purpose of allowance against business profits of the Bank. The claim of the assessee was that the entire depreciation was to be allowed but the ITO allowed only proportionate depreciation, i.e., five -sixth of the whole depreciation. This view was upheld by the AAC. However, the Tribunal allowed the entire depreciation. As regards the lifts and air -conditioning plant, it was held by the ITO as well as the AAC that only proportionate depreciation could be allowed. The Tribunal, however, allowed the entire claim.
As regards the development rebate in respect of the lifts and air -conditioning plant, this was totally disallowed by both the ITO and the AAC. On appeal, the Tribunal allowed this claim and permitted Department rebate in toto as claimed by the assessee.

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