| Case ID |
39449fd3-3a73-41fb-a964-817408af8f2e |
| Body |
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| Case Number |
IT REFERENCE No. 5 OF 1961 |
| Decision Date |
Apr 06, 1965 |
| Hearing Date |
|
| Decision |
The Punjab High Court ruled in favor of the assessee-firm regarding the allowance of depreciation under section 10(2)(vi) of the Indian Income-tax Act, 1922, affirming that they were entitled to the full year’s depreciation despite the seasonal nature of their business. The court also upheld the Appellate Assistant Commissioner's decision regarding the tax payment to the District Board, determining that such expenses were necessary for conducting business in the District Board's jurisdiction and thus allowable under section 10(2)(xv). |
| Summary |
In the case of IT REFERENCE No. 5 OF 1961, the Punjab High Court addressed significant questions surrounding the applicability of depreciation and business expenditure under the Income-tax Act of 1961 and the corresponding provisions of the Indian Income-tax Act of 1922. The court found that the assessee-firm, which operated a seasonal business renting out cane-crushers and iron pans to village cultivators, was entitled to full-year depreciation for the assessment years 1951-52 and 1952-53. This ruling was based on precedent established in CIT v. Sarveshwar Nath Nigam, which clarified that the second proviso to rule 8 of the Indian Income-tax Rules applied to such cases. The court also ruled that taxes paid to the District Board were legitimate business expenses, as they were necessary for the firm's operations within the board's jurisdiction. This decision underscores the importance of proper expense classification and the rights of businesses to claim deductions for necessary operational costs. |
| Court |
Punjab High Court
|
| Entities Involved |
Not available
|
| Judges |
A.N. Grover,
S.K. Kapur
|
| Lawyers |
H. Hardy,
Dalip K. Kapur,
A.N. Kirpal,
Keshav Dayal,
B.N. Kirpal
|
| Petitioners |
Commissioner of Income Tax
|
| Respondents |
Banarsi Dass & Sons
|
| Citations |
1966 SLD 393 = (1966) 61 ITR 414
|
| Other Citations |
CIT v. Sarveshwar Nath Nigam [1963] 48 ITR 853,
Simbholi Sugar Mills Ltd. v. CIT [1962] 45 ITR 125 (All.),
CIT v. Gurupada Dutta [1946] 14 ITR 100 (PC)
|
| Laws Involved |
Income-tax Act, 1961,
Indian Income-tax Act, 1922
|
| Sections |
32,
37(1),
10(2)(vi),
10(2)(xv)
|