COMMISSIONER OF INCOME-TAX, PUNJAB JAMMU & KASHMIR vs M/S. ALPS THEATRE, PATIALA

The Supreme Court held that under Section 10(2)(vi) of the Indian Income-tax Act, 1922, depreciation cannot be claimed on the cost of land as it does not depreciate in value. The Court clarified that the term 'building' in the context of depreciation refers solely to the structure and not the land it occupies, as allowing depreciation on land would misrepresent the true income. The appeal by the Revenue was allowed, overturning the previous decisions of the Appellate Tribunal and the High Court.