VEERAPPA TRANSPORTS Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal, Madras, has referred the following question of law to this court under section 66(1) of the Income-tax Act :

(2.) THE assessee is a registered firm carrying on business in transport service. THE partnership consists of the father Veerappa Gounder and his four sons. THE business was originally carried on by the father and his sons who together constituted a Hindu undivided family. THE family was disrupted and the members of the family entered into a partition arrangement by a deed dated September 30, 1957. THE very next day, on October 1, 1957, the erstwhile members of the family constituted themselves into a firm of partnership taking over the joint family transport business as the business of the partnership. That the entire business of the Hindu undivided family was taken over by the newly formed partnership and that the business of the family was continued without any break by the subsequent partnership is not in dispute. For the accounting period between October 1, 1957, and March 31, 1958, relevant to the assessment year 1958-59, the assessee firm claimed additional depreciation in regard to four motor vehicles which were purchased by the original Hindu family and which were transferred from the family to the partnership as a result of the partition and the formation of the partnership. THE Income-tax Officer disallowed the claim. On appeal by the assessee, the Appellate Assistant Commissioner of Income-tax, Tiruchirapalli, also negatived the relief to the assessee following the view taken by the Appellate Tribunal in another case. A further appeal by the assessee to the Income-tax Appellate Tribunal also failed as the Tribunal followed its view expressed in another matter. THE reasoning of the Tribunal is thus set out in its order :

(3.) THE allowance can be claimed by the assessee for a period of five years provided the building or machinery was erected or installed after the 31st March, 1948. THE statute has, however, fixed an outer limit beyond which the benefit cannot be claimed or availed of. After the 31st day of March, 1959, the benefit of this section would be lost. This means that in a case where the building or a plant was erected or installed on the 31st day of March, 1957, the additional depreciation allowance could be claimed only for one year.