COMMISSIONER OF INCOME TAX Vs. SAHANA AND SONS S K

JUDGEMENT

(1.) THIS is a reference at the instance of the Commissioner of Income-tax, Bihar and Orissa, by the Appellate Income-tax Tribunal asking for the opinion of the Court on the question : "Is the assessee entitled to the full amount of depreciation under section 10(2)(vi) of the Income-tax Act irrespective of the period of user

(2.) THE facts are not in dispute. THE assessee is a Hindu undivided family and had a business in mica and rice mill. THE assessee keeps his account according to the Bengali year from April to April. In the assessment for the year 1940-41, the assessee claimed depreciation for machinery and building for the entire period of twelve months instead of eight and a half months even though on the first January, 1940, the assessee had transferred all his business in mica and rice mill along with the machinery and building to a joint stock company. THE department allowed depreciation only for 8 1/2 months upon their view that the assessee ceased to be the owner of the mill and building on the 1st of January, 1940, and, therefore, could not claim depreciation for the entire twelve months. THE Appellate Tribunal however, held that the Indian Income-tax Act did not authorise any apportionment of the depreciation allowance in regard to time. Hence the reference at the instance of the Commissioner.

(3.) FAZL ALI, C.J. - I agree.