Ayyappan Textiles Ltd., Varadhalakshmi Mills Ltd. and Sitalakshmi Mills Ltd. vs Commissioner of Income Tax

R. Jayasimha Babu, J.—The questions referred to us in these references are capable of being disposed of by a common order and by this

common order, the references are being disposed of. The question referred to us is as to whether the amendment effected to the Income Tax

(Fourth Amendment) Rules, 1983, on April 2, 1983, is applicable to the assessment of the assessees'' income for the assessment year 1983-84.

The assessees claimed that the amendment to the Rule was procedural in nature and that claim was negatived by the Tribunal. The amendment

effected to the Rule which was to the rate at which the depreciation is to be allowed, cannot be regarded as a matter of procedure. It is a

substantive right. It is well settled that the law applicable for assessment is the law applicable as on the date of commencement of the assessment

year and not the change in the law amended subsequent to that date. The amending Rule came into force only after the commencement of the

assessment year and was not applicable to these assessments.

The question referred to us is, therefore, answered against the assessees and in favour of the Revenue. The Revenue shall be entitled to costs in

the sum of Rs. 750 (rupees seven hundred and fifty only) payable in one set.