Case: G.K. Choksi and Company Vs. Commissioner of Income Tax, Gujarat

word "business" appearing in sub-section 32(1)(iv) to include "profession" as well. The legislature intended to have different scope for business and profession in Section 32(1). If the legislature had intended to include "profession" in the word "business", then there was no need to mention two different words, i.e., "business" or "profession" in Section 32(1) of the Act.13. Section 32(1) stipulates that on buildings, machinery, plant or furniture which is owned by an assessee and used for the purposes of "business or profession", depreciation shall be available by way of deduction. Section 32(1) uses the phrase "the following deductions shall", therefore it is apparent that the said sub-section is laying down general conditions or basic requirements, on fulfillment of which, an assessee shall become eligible for deductions as provided in the various clauses which follow. The learned counsel appearing for the Revenue has rightly contended that from the Scheme of the Section it is discernible that various clauses shall operate on further specific conditions laid down in each individual clause. Clause (i) deals with case of ships other than ships ordinarily plying on inland waters, clause (ii) pertains to buildings, machinery, plant or furniture, other than ships and is applicable to both business and profession in regard to the claim for depreciation in respect of the building , machinery, plant or furniture. In clause (iv) the legislature has used the word "business" only. It means that the legislature was conscious of the fact that the business and profession are different and separate and they cannot be used interchangeably. It is a pointer to the fact that the Legislature under clause (iv) intended to restrict the benefit to the assessees carrying on business only. In sub-clause (ii) the legislature has specifically extended the benefit of depreciation to the assessees carrying on "business" as well as "profession" whereas in sub-section (iv), the legislature has restricted the benefit to the asseessees carrying on "business" only. 14. This Court rendered the decision in Barendra Prasad Rays case (supra) in the context of Section 9(1), wherein the Court, after discussing the case laws, definitions, dictionary meanings, concluded as under: "The word "business" is one of wide import and it means an activity carried on continuously and systematically by a person by the application of his labour or skill with a view to earning an income. We are of the view that in the context in which the expression "business connection" is used in s.9(1) of the Act, there is no warrant for giving a restricted meaning to it excluding "professional connections" from its scope." 15. In Barendra Prasad Rays case (supra), this Court was interpreting the expression "business connection" as used in Section 9(1) of the Act and held that there was no warrant for giving a restricted meaning to it to exclude "professional connections" from its scope. Section 9(1) deals with a different situation. It occurs in Chapter II of the Act, while Section 32 occurs in Part D of Chapter IV of the Act. This decision was rendered on the peculiar facts and circumstance of the said case and has to be restricted to the situation prevailing therein. It cannot be applied to every case irrespective of its facts. Section 32 finds place in Chapter IV, Part D of the Act which deals with "profits and gains of business or professions. The wording of two provisions, i.e., Section 9(1) and Section 32 of the Act are quite different and the interpretation put on the words "business connection" while interpreting Section 9(1), cannot be applied to a fact situation under Section 32(1)(iv) to hold that the expression "business" occurring in Section 32(1)(iv) would include "profession" as well. 16. As already observed, Section 32(1) lays down the general conditions or basic requirements on fulfillment of which an assessee shall become eligible for deduction as provided under various clauses which follow. Clauses (i), (ii) and (iv) operate in different fields and deal with different set of assessees for the purposes of claiming depreciation. In our opinion Barendra Prasad Rays case (supra) has no application in the present case. 17. Part D consists of Sections 28 to 43 of the Act which deals with profits and gains of business or profession. Though the phrase has been used in certain sections as "business or profession", but nowhere has the phrase been used as the "business and profession". In fact, wherever the legislature intended that the benefit of a particular provision should be for both business or profession, it has used the words "business or profession" and wherever it intended to restrict the benefit to either business or profession, then the legislature has used the word either "business" or "profession", meaning thereby that it intended to extend the benefit to either "business" or "profession", i.e., the one would not include the other. 18. We agree with the submission made by the counsel for the appellant that in view of the settled law, if two interpretations are possible, then the one in favour of the assessee should be adopted. But, we are of the view that in the present case two interpretations are not possible as the word "business" occurring in clause (iv) of Section 32(1), by no stretch of imagination, can be said to include "profession" as well. If the expression "business" is interpreted as including within its scope "profession", it would not mean that the lacuna has been made good by giving a wider interpretation to the word business. There is nothing in Section 32(1)(iv) which envisages the scope of word "business" to include in it "profession" as well. If the expression "business" is interpreted to include within its scope "profession" as well, it would be doing violence to the provisions of the Act. Such interpretation would amount to first creating an imaginative lacuna and then filling it up, which is not permissible in law. The contention of the counsel for the appellant that Section 32(1)(iv) should be given purposive interpretation to include "profession", has thus to be rejected.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]12. We do not find much substance in the submissions advanced by the learned counsel for the appellant. Section 32(1) of the Act does not help the appellant in any way to construe the word "business" appearing in32(1)(iv) to include "profession" as well. The legislature intended to have different scope for business and profession in Section 32(1). If the legislature had intended to include "profession" in the word "business", then there was no need to mention two different words, i.e., "business" or "profession" in Section 32(1) of the Act.13. Section 32(1) stipulates that on buildings, machinery, plant or furniture which is owned by an assessee and used for the purposes of "business or profession", depreciation shall be available by way of deduction. Section 32(1) uses the phrase "the following deductions shall", therefore it is apparent that the saidis laying down general conditions or basic requirements, on fulfillment of which, an assessee shall become eligible for deductions as provided in the various clauses which follow. The learned counsel appearing for the Revenue has rightly contended that from the Scheme of the Section it is discernible that various clauses shall operate on further specific conditions laid down in each individual clause. Clause (i) deals with case of ships other than ships ordinarily plying on inland waters, clause (ii) pertains to buildings, machinery, plant or furniture, other than ships and is applicable to both business and profession in regard to the claim for depreciation in respect of the building , machinery, plant or furniture. In clause (iv) the legislature has used the word "business" only. It means that the legislature was conscious of the fact that the business and profession are different and separate and they cannot be used interchangeably. It is a pointer to the fact that the Legislature under clause (iv) intended to restrict the benefit to the assessees carrying on business only. In(ii) the legislature has specifically extended the benefit of depreciation to the assessees carrying on "business" as well as "profession" whereas in(iv), the legislature has restricted the benefit to the asseessees carrying on "business" only.We agree with the submission made by the counsel for the appellant that in view of the settled law, if two interpretations are possible, then the one in favour of the assessee should be adopted. But, we are of the view that in the present case two interpretations are not possible as the word "business" occurring in clause (iv) of Section 32(1), by no stretch of imagination, can be said to include "profession" as well. If the expression "business" is interpreted as including within its scope "profession", it would not mean that the lacuna has been made good by giving a wider interpretation to the word business. There is nothing in Section 32(1)(iv) which envisages the scope of word "business" to include in it "profession" as well. If the expression "business" is interpreted to include within its scope "profession" as well, it would be doing violence to the provisions of the Act. Such interpretation would amount to first creating an imaginative lacuna and then filling it up, which is not permissible in law. The contention of the counsel for the appellant that Section 32(1)(iv) should be given purposive interpretation to include "profession", has thus to be rejected.