FRANCIS VALLABARAYAR Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE question referred to this Court under S. 66(1) of the Indian IT Act was:

(2.) WHILE we are unable to accept the contention of the learned counsel for the assessee, that the scope of the amendment effected by S. 10(5)(c) was wholly explanatory of the law as it stood prior to 1953. we are unable to accept the contention of the learned counsel for the Department, that it was only under S. 10(5) (c) any provision was made for granting depreciation allowance for assets which came to the assessee by way of gift or inheritance. We should like to make it clear that we are confining ourselves only to a question of inheritance now. We accept the contention of the learned counsel for the assessee, that the principle laid down by the Rangoon High Court in CIT vs. E. Solomon & Sons (1933) 1 ITR 324 (Rh), should apply and that the assessee should be declared entitled to the depreciation allowance, the quantum of which is yet to be ascertained, though the allowance is claimed with reference to property, to acquire which the assessee himself did not incur any expenditure because he got it by inheritance from his father. it is true that the statutory expression page, C.J. had to consider in CIT vs. Solomon and Sons(supra) was "the original cost thereof to the assessee". That was subsequently amended and the statutory expression that was in force in the year of assessment 1951 -52 was "actual cost" to the assessee. We do not think there is any real difference between these statutory expressions. page, C.J., observed :

(3.) THE learned counsel for the assessee referred to the observations of Lord Atkin at pages 217 -8 in Corporation of Birmingham vs. Barnes (1933 -35) 19 Cases 195. But as the pointed out by page, C.J., in CIT vs. E. Solomon and Sons (supra), the wording in the English Finance Act differs materially, and the question at issue has to be determined really on the language of the Indian IT Act.