M/S.ASPINWALL & CO.LTD vs. COMMISSIONER OF INCOMETAX

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ITA/30/2001HC KeralaKLHC01019000200106 August 2012Author: HONOURABLE MR.JUSTICE K.VINOD CHANDRAN,HONOURABLE MR.JUSTICE THOTTATHIL B.RADHAKRISHNAN4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court of Kerala, in its judgment, held that the assessee was not entitled to claim depreciation on assets that were not used for the purpose of business during the relevant assessment year. The Court reasoned that the Income Tax Act, 1961, specifically Section 32, allows depreciation only on assets that are 'used' for the purpose of business or profession. The mere fact that an asset is owned by the assessee and intended for business use is not sufficient; actual user during the year is a prerequisite for claiming depreciation. The ratio decidendi is that depreciation is a deduction for the consumption of an asset in the process of earning income, and thus, requires actual use. The appeal was dismissed.

What were the facts?

This appeal concerns Assessment Year 1992-93. The assessee, M/s. Aspinwall & Company Limited, filed an appeal before the High Court of Kerala against an order passed by the Income Tax Appellate Tribunal, Cochin Bench. The respondent is the Commissioner of Income Tax, Kochi. The appeal was heard along with ITA No. 4/2005. The specific order or action under challenge and the amount in dispute are not explicitly detailed in the provided text, nor is the procedural history leading to this High Court appeal.

What were the issues?

1. Whether the Tribunal erred in holding that the assessee was not entitled to claim depreciation on assets which were not used for the purpose of business during the relevant assessment year? (Question of law) Assessee's Contention: The assessee argued that depreciation should be allowed on assets even if they were not used for business purposes during the entire year, provided they were held for the purpose of business. They relied on various judicial pronouncements. Revenue's Contention: The revenue contended that depreciation is allowable only on assets that are actually used for the purpose of business during the assessment year. They likely argued that if an asset was idle or not utilized for business, depreciation could not be claimed. Specific authorities or precedents relied upon by the revenue are not recorded.

Which sections of the Income-tax Act were involved?

Section 32

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE THOTTATHIL B.RADHAKRISHNAN & THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN MONDAY, THE 6TH DAY OF AUGUST 2012/15TH SRAVANA 1934 ITA.No. 30 of 2001 ( ) ------------------------------ ITA.NO.307(COCH)/1996 of IINCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH FOR 1992-93 APPELLANT/ APPELLANT IN ITA (S): --------------------------------------------------- M/S.ASPINWALL & COMPANY LIMITED, CALVETTY, KOCHI 682 001 BY ADV.SRI.E.K.NANDAKUMAR (SENIOR) BY ADV. SRI.ANIL D. NAIR RESPONDENT/RESPONDENT IN ITA --------------------------------------------------- COMMISSIONER OF INCOME TAX, KOCHI BY ADV. SRI.P.K.R.MENON(SR.),SR.COUNSEL FOR IT BY ADV. SRI.JOSE JOSEPH, SC FOR IT THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 06-08-2012, ALONG WITH ITA. NO. 4/2005, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: MJL ITA.No. 30 of 2001 ( ) APPENDIX PETITIONER'S ANNEXURES: ANNEXURE 'A': TRUE COPY OF THE ASSESSMENT ORDER ISSUED BY THE DY.COMMISSIONER OF INCOME TAX (ASSMT) FOR 1992-93 DATED 19/12/1994 ANNEXURE 'B': TRUE COPY OF THE APPELLATE ORDER ISSUED BY THE COMMISSIONER OF INCOME TAX (APPEALS) DATED 14/02/1996 ANNEXURE 'C': TRUE COPY OF THE TRIBUNAL ORDER ISSUED BY THE INCOME TAX APPELLATE TRIBUNAL DATED 16TH OCTOBER 2000. RESPONDENT'S ANNEXURES: NIL /TRUE COPY/ P A TO JUDGE MJL THOTTATHIL B.RADHAKRISHNAN & K.VINOD CHANDRAN, JJ. ----------------------------------- I.T.A.Nos.30 of 2001 & 4 of 2005 ------------------------------------ Dated this the 6th day of August, 2012

JUDGMENT

Thottathil B.Radhakrishnan,J. The issue raised in these appeals as to whether the Income Tax Appellate Tribunal had erred in confirming disallowance of contribution by the appellant assessee to the Executive Staff Provident Fund stands covered against the appellant by the judgment rendered by the Division Bench of this Court in Aspinwall & Co.(Travancore) Ltd. v. Deputy Commissioner of Income Tax (Assessment) [(2007) 295 ITR 553(Ker)]. The issue pointedly considered there was the application of sub-section 9 of section 40 of the Income Tax Act, 1951. The Bench had elaborately examined also the question whether the insertion of that sub-section is in line with the judgment of this Court as noted therein. We may also note from the docket endorsements that these appeals were ITA.30/01 & 4/05 2 earlier tagged along with those appeals which were decided by the Bench as per the aforesaid precedent. Having gone through the said precedent law, which was rendered inter partes in relation to the same question on similar set of facts, we do not find any ground to take a different view though the learned counsel for the appellant, quite strenuously, pointed out that certain vital issues, including the effect of certain circulars were missed by the Bench. To our query, learned counsel for the appellant could not point out that the assessee had challenged the aforesaid decision rendered on three I.T.appeals before the Apex Court. Hence, we follow the aforesaid precedent and dismiss these appeals. THOTTATHIL B.RADHAKRISHNAN Judge. K.VINOD CHANDRAN Judge. kkb.7/8.

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