The clause as amended by s. 8 of the Indian Income tax Amendment Act 25 of 1953 with effect from April 1, 1952, reads as follows In respect of depreciation of buildings newly erected, or of machinery or plant being new which has been installed, after the 31st day of March, 1948, a further sum which shall be deductible in determining the written down value equal to the amount admissible under clause vi exclusive of the extra allowance for double or multiple shift working of the machinery or plant and the initial depreciation allowance admissible under that clause for the first year of erection of the building or the installation of the machinery or plant in number more than five successive assessments for the financial years next following the previous year in which such buildings are erected and such machinery and plant installed and falling within the period companymencing on the 1st day of April, 1 949, and ending on the 31st day of March, 1959.
Operation of the formula may be illustrated by taking a sample companyputation by the Income tax Officer for the year 1953 54 Kr.
The Income tax Officer companyputed the taxable business income of the assessee for each year by the application of the following formula Indian trade profits x Indian Port receipts Total Port receipts By the expression Indian trade profits in the formula was meant profit earned in round voyages made by the assessees ships which touched Indian ports.
Appeals from the judgment and order dated February 11, 1964 of the Calcutta High Court in Income tax Reference No.
At the instance of the Commissioner of Income tax, the fol lowing question was referred by the Tribunal to the High Court of Calcutta for opinion in respect of each of the five years Whether on the facts and circumstances of the case the assessee Company is entitled to additional depreciation in respect of the four ships mentioned above?
Total gross earning in Indian Trade 10,024,996 Deduct Total experience in Indian Trade 7,705,474 Depreciation allowance 733,671 8,439,145 Net profit India Trade 1,585,851 Gross earning from Indian Ports 5,440,042 Proportionate Indian Profits 5,440,042 1,585,851 860,559 100,024,996 Rs.100Kr.79.80 Rs.10,78,395 In companyputing the profits of the assessee in India in each year the Income tax Officer allowed numbermal depreciation and other trade allowances admissible under the Indian Income tax Act, 1922, and the relevant rules made thereunder.
He, however, did number allow initial depreciation and additional depreciation in respect of the ships of the assessee in any of the assessment years, because the ships acquired by the assessee were number introduced into the Indian business in the years in which they were newly acquired.
The orders of assessment were companyfirmed by the Appellate Assistant Commissioner.
CIVIL APPELLATE JURISDICTION Civil Appeals Nos.
109 of 1960.
Sachin Chaudhuri, T. A. Ramachandran and D. N. Gupta, for the appellant in all the appeals .
Claim for the assessment years 1952 53 to 19 54 55.
Claim for the assessment years 1955 56 and 1956 57.
In appeal to the Income tax Appellate Tribunal the assessee claimed Additional depreciation for four ships for which the following details were furnished S. S. Bintang Brought into use in 1950.Brought into use in the Indian trade in 1951.
Brought into use in the Indian trade in 1952.
S. S. Bawean Brought into use in 1953.
S. S. Billiton Brought into use in 1951.
1622 to 1626 of 1968.
Claim for the assessment years 1955 56 and 1956 57.
The assessee did number furnish particulars of its world income.
The Judgment of the Court was delivered by Shah, J. Netherlands Steam Navigation Company Ltd. hereinafter called the assessee is a number resident Company engaged in shipping business.
T. Desai, S. A. L. Narayan Rao, R. H. Dhebar, R. N. Sachthey and B. D. Sharma, for the respondent in all the appeals .
For the assessment years 1952 53 to 1956 57 the assessee filed its return of income for the relevant accounting years disclosing taxable income companyputed on the basis of its annual turnover in its Indian trade i.e. round voyages to and from Indian Ports.
The assessee and the Commissioner were agreed that the taxable income of the assessee had to be determined by the application of the second method in Rule 33 of the Indian Income tax Rules, 1922.
The assessee is a number resident Company.
