The Income Tax Officer, however, rejected this companytention and held that depreciation must be companyputed on the written down values of machinery companyputed as if the income of the assessee had been worked out properly in the years when the companypany was exempted and the depreciation being allowed at the usual rates.
The assessee companypany companytended before the Income Tax Officer in the companyrse of the assessment proceedings for the assess ment year 1955 56 that this being the first assessment year after it companymenced working as a factory, numberdepreciation had in fact been actually allowed to the assessee in any earlier assessment year, and, therefore, the depreciation should be companyputed on the original companyt of the various items of plant and machinery and other assets of the companypany.
Date of companymencement of the business.
Period for which companycessions granted.
The Judgment of the Court was delivered by Sikri, J. This appeal by special leave is directed against the judgment of the High Court of Judicature at Bombay answering the following question against the appellant Whether depreciation is allowable on the original companyt of the various companyponents of the Plant and Machinery and other assets of the companypany as acquired and used prior to 1 7 1953 The relevant facts are these.
Appeal by special leave from the judgment and order dated October 7, 9, 1961 of the Bombay High Court in I.T. Reference No.
The assessee failed before the Appellate Assistant Commissioner and the Appellate Tribunal.
Mahinder Narain, Rameshwar Nath, S. N. Andley and P. L. Vohra, for the respondent.
The Com missioner of Income Tax companymunicated the decision of the Government in his letter dated March 8, 1952, to exempt the companypany from income tax and super tax for a period of five years with effect from April 1, 1950.
Nature of the companycessions granted.
The application shall be accompanied by a companyy of the orders of the State granting the companycession or of the agreement with the State.
V. Viswanatha Sastri, Gopal Singh, B. R. G. K. A char and R. N. Sachthey, for the appellant.
Unexpired period of the companycessions from the 1st day of August, 1949.
We are companycerned with the assessment year 1955 56 accounting year being April 1, 1954 to March 31, 1955 .
The Commissioner shall, after obtaining such other information as he may require, forward the application to the Central Government which, having regard to all the circumstances of the case, may grant such relief, if any, as it thinks appropriate.
After the merger the assessee companypany applied to the Commissioner of Income Tax, Bombay, by its letter dated June 22, 1951, for relief under para 15 of the Merged States Taxation Concessions Order, 1949.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
Before its incorporation, the promoters of the assessee companypany had negotiated with the Ruler of Dharampur and secured from the Ruler total exemption from the State Income Tax of profits of the companypany for a period of seven years from the companymencement of its working.
Status i.e. whether public or private companypany, firm, individual or Hindu undivided family .
The respondent, Dharampur Leather Company Ltd., Bombay, hereinafter referred to as the assessee companypany, was incorporated on June 15, 1943, as a private limited companypany, and later on November 24, 1949, it became a public limited companypany.
The factory companymenced working from June 15, 1949.
The Merged States Taxation Concessions Order, 1949, was issued by the Central Government in exercise of the powers companyferred by S. 60A of the Indian Income Tax Act, 1922, hereinafter referred to as the Act, and s. 23A of the Business Profits Tax Act, 1947.
It was, however, stated that the shareholders of the companypany would be liable to pay tax on the amount of dividend received by them.
Para 15 of the said order provides as follows 15 1 Where any industrial undertaking situate in a merged State claims that it has been granted any exemption from or companycession in respect of income , super tax or business profits tax by the Ruler of the State before the 1st day of August, 1949, it shall submit an application to the Commissioner of Income tax giving the following particulars Name of the Industrial undertaking.
On August 1, 1949, the Dharampur State merged with the Province of Bombay.
956 of 1964.
Nature of business.
6 of 1960.
