Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | Income Tax Act 1961: S.32(1)(iv): |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Dismissed |
Headnote | Income Tax Act, 1961: S.32(1)(iv):Depreciation by way of deduction - Assessee - Firm of Chartered Accountants constructing a building for its employees - Claiming depreciation of 40% in terms of provision u/s 32(1)(iv) - Rejected by ITO on ground that benefit under the provisions applicable to an assessee carrying business and not available to professionals - Reversed by appellate authority - Tribunal restoring the order of ITO - Confirmed by High Court - On appeal, held, the word business appearing in s. 32(1)(iv) cannot be construed so as to include "profession" as well-In terms of provisions under clause 32(1) legislature intended to restrict the benefit under the provisions to assessee carrying on business only - Inclusion of profession within the scope of expression business would be doing violence to provisions of the Act - Such an interpretation not permissible in law - Interpretation of Statutes - Legislative intendment - Construing of.Words & Phrases:'Business' and 'Profession' - Meaning of in the context of S.32(1)(iv) of the Income Tax Act, 1961.The question which arose for determination in the present appeal was as to whether in the facts and circumstances of the case the assessee-appellant, a Chartered Accountant's firm would be entitled to deduction under Section 32(1)(iv) of the Income Tax Act, 1961.Appellant-Firm contended that Section 32 of the Income Tax Act relates both to "business" as also "profession"; that the assessee carrying on profession would be entitled to the depreciation under Section 32(1)(iv) though the word "profession" does not find mention in sub-clause (iv); That the words "business" and "profession" are defined separately under the Act; and the definitions under the Act are subject to the context and can be read interchangeably at least one term carrying on within its fold other term if the context so requires; That, the word "business" appearing in sub-clause (iv) of Section 32(1) in the context clearly refers to both "business" and "profession"; That, the word "business" is used in the context of employees and is clearly intended to cover both "business" as also "profession"; That Section 32(1)(iv) should be given a purposive interpretation to extend the benefit to the professionals as well; That if two opinions are possible, then the one in favour of the assessee should be adopted and that Barendra Prasad Ray's case is clearly applicable to the facts of the present case and the High Court has erred in distinguishing the same.Revenue submitted that Section 32(l)(iv) of the Act cannot be made applicable to professionals, as there is no reference in this sub-clause to the assessees who are in profession; That sub-section (1) of Section 32 lays down general conditions or basic requirements on fulfilment of which an assessee shall become eligible for deduction as provided in the various clauses which follow; That, from the scheme of the section various clauses would operate on further specific conditions laid down in each such individual clause(s); That though Section 32(1) refers to both "business" and "profession", the sub-sections, namely, (i) and (iv) would not be controlled by it; and That Barendra Prasad Ray's case has no application to the facts of the instant case since in the said case, this Court was dealing with a situation arising under Section 9 of the Act which deals with income deemed to accrue or arise in India. |
Judge | Hon'ble Mr. Justice Ashok Bhan |
Neutral Citation | 2007 INSC 1188 |
Petitioner | G.k. Choksi & Company |
Respondent | Commissioner Of Income Tax, Gujarat |
SCR | [2007] 12 S.C.R. 561 |
Judgement Date | 2007-11-27 |
Case Number | 7486 |
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