| Case ID |
5e764243-e9cf-4073-b106-1958f47257bd |
| Body |
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| Case Number |
MISC. JUDICIAL CASE NO. 49 OF 1934 |
| Decision Date |
Dec 16, 1935 |
| Hearing Date |
|
| Decision |
The court held that the depreciation allowance under section 10(2)(vi) of the Indian Income-tax Act, 1922 could not be granted for machinery that remained idle during the assessment year due to the suspension of operations. The ruling emphasized that depreciation is granted not merely for the machinery's disuse but for its use in earning income. The decision was made in favor of the Commissioner of Income Tax, confirming that the phrase 'used for the purposes of the business' refers specifically to the accounting year in question. |
| Summary |
This case revolves around the interpretation of depreciation allowances under the Income-tax Act, focusing specifically on section 10(2)(vi) of the Indian Income-tax Act, 1922. The Central Provinces Manganese Ore Company Ltd. sought to claim depreciation for machinery that had been idle due to operational suspension, arguing that income generated from previously mined ore should qualify for depreciation claims. The judgment clarified that the allowance is contingent upon the machinery being employed in earning income during the accounting year, thus denying the claim. The ruling establishes critical precedents regarding the application of depreciation in income tax assessments, reinforcing the necessity of active use in the relevant period for claims to be valid. This case is pivotal for businesses navigating tax obligations related to asset depreciation and provides insight into judicial interpretations that affect financial reporting and tax strategy. |
| Court |
Central Provinces
|
| Entities Involved |
Commissioner of Income Tax,
Central Provinces Manganese Ore Co. Ltd.
|
| Judges |
Subhedar,
Gruer
|
| Lawyers |
D.N. Choudhury
|
| Petitioners |
Central Provinces Manganese Ore Co. Ltd.
|
| Respondents |
Commissioner of Income Tax
|
| Citations |
1937 SLD 2,
(1937) 5 ITR 734
|
| Other Citations |
Bhikaji Venkatesh v. CIT [1936] ITR 626,
N.D. Radhakrishan & Sons v. CIT [1929] 3 ITC 73,
Sri Gopalji Co. v. CIT [1931] 5 ITC 267,
AIR Lah. 376,
32 PLR 335,
Comp. Cas. 299
|
| Laws Involved |
Income-tax Act, 1961
|
| Sections |
32,
10(2)(vi)
|