| Case ID |
0281f959-3e8f-4845-9ba0-f9a214d729c0 |
| Body |
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| Case Number |
O.P. No. 301 OF 1938 |
| Decision Date |
Oct 23, 1939 |
| Hearing Date |
|
| Decision |
The Madras High Court ruled in favor of the assessee, Bosotto Brothers Limited, allowing them a depreciation deduction under section 10(2)(vi) of the Indian Income-tax Act, 1922, for the hotel building leased to the firm 'D'. The court found that the leasing of the property was part of the company's business, as outlined in its memorandum of association. The judges emphasized that the business of leasing out the hotel could not be regarded as separate from the hotel business itself, thus entitling the assessee to claim depreciation despite the fact that the hotel was not actively operated by them during the assessment year in question. |
| Summary |
In the case of Commissioner of Income Tax v. Bosotto Brothers Limited, the Madras High Court addressed the issue of whether a company could claim a depreciation deduction for a hotel building that it had leased out. The court held that the leasing of the hotel was indeed part of the company's business activities, allowing the assessee to benefit from depreciation deductions as per the provisions of section 10(2)(vi) of the Indian Income-tax Act, 1922. The decision underscored the importance of recognizing leasing activities as integral to business operations, thereby reinforcing tax entitlements related to property used in business. This ruling is significant for companies involved in similar business models, where property is leased rather than directly operated. The judgment highlighted the necessity for tax statutes to be interpreted in favor of the taxpayer, particularly when multiple provisions may apply to a case. Keywords such as 'depreciation allowance', 'income tax', and 'business leasing' are central to this ruling and are relevant for ongoing discussions in tax law and business operations. |
| Court |
Madras High Court
|
| Entities Involved |
Commissioner of Income Tax,
Bosotto Brothers Limited
|
| Judges |
Sir Lionel Leach, C.J.,
Mockett, J.,
Krishnaswami Ayyangar, J.
|
| Lawyers |
M. Subbaraya Iyer,
K.V. Sesha Iyengar
|
| Petitioners |
Commissioner of Income Tax
|
| Respondents |
Bosotto Brothers Limited
|
| Citations |
1940 SLD 58 = (1940) 8 ITR 41
|
| Other Citations |
Mangalagiri Rice Factory v. CIT AIR [1926] Mad. 1032,
S. Roy Chowdhury v. CIT [1935] 3 ITR 114 (Cal.)
|
| Laws Involved |
Income-tax Act, 1961,
Indian Income-tax Act, 1922
|
| Sections |
32,
4(1),
10(2)(vi),
9
|