PUNJAB NATIONAL BANK LIMITED Vs. COMMISSIONER OF INCOME TAX
LAWS(DLH)-1983-1-27
HIGH COURT OF DELHI
Decided on January 07,1983

PUNJAB NATIONAL BANK LIMITED Appellant
VERSUS
COMMISSIONER OF INCOME TAX Respondents


Cited Judgements :-

COMMISSIONER OF INCOME TAX VS. PUNJAB NATIONAL BANK [LAWS(DLH)-1995-9-89] [REFERRED TO]
PUNJAB BONE MILLS VS. COMMISSIONER OF INCOME TAX [LAWS(P&H)-2008-7-105] [REFERRED TO]
SCIENTIFIC INSTRUMENT CO. LTD VS. COMMISSIONER OF INCOME TAX [LAWS(ALL)-2011-8-218] [REFERRED TO]


JUDGEMENT

KAPUR,J. - (1.)A number of income -tax references have been heard by us in which the assessed concerned is the Punjab National Bank. In some of the assessment years under consideration, the original assessed 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 reference in chronological order. There are seven references in all, which relate to the assessment years 1960 -61 to 1965 -66, i.e., six different assessment years. There are two references relating to the assessment year 1963 -64. In this judgment the assessment year 1960 -61 is under consideration, the number of the relevant reference being ITR No. 104 of 1972.
(2.)THE following questions have been refereed to us in relation to this year :
'1. Whether, on the facts and in the circumstances of the case, the assessed 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 section 9 of the Indian Income -tax Act, 1922 ? 2. Whether, on the facts and in the circumstances of the case, the assessed was entitled to proportionate depreciation in respect of lifts and air -conditioning plant in so far as they related to the portion of the property which was let out to tenants and income from which was chargeable u/s. 9 of the Indian Income -tax Act, 1922 ? 3. Whether, on the facts and in the circumstance of the case, the assessed was entitled to development rebate in respect of lifts and air -conditioning plants fixed in the building, portion of which was let out to tenants and income from which portion was chargeable to tax u/s. 9 of the Indian Income -tax Act, 1922 ?

The three questions 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 assessed 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 sixth 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 learned counsel for the assessed to explain how it happened that a portion of the head office was let out to some other party.

(3.)THE whole building is fitted with air -conditioning and there are also lifts operating. The questions which have arisen in relation to the building, air -conditioning plant and the lifts in the building are interconnected. 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 assessed was that the entire depreciation was to be allowed, but the ITO allowed only proportionate depreciation, i.e., five -sixths of the whole depreciation. This view was upheld by the AAC. However, the Tribunal allowed the entire depreciation.
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