Commissioner of Income Tax vs Bennet Coleman and Co. Ltd.

T.D. Sugla, J.—The question of law referred to us at the instance of the Department is:

"Whether, on the facts and in the circumstances of the case, the written down value of the assets in question for the assessment year 1956-57 required to be computed under the provisions of clause (b) of section 10(5), independently of clause (a) thereof ?"

It is common ground that the assets in dispute were acquired during the previous year for the assessment year 1955-56 and not during the previous year for the assessment year 1956-57 which is the year under consideration. The question that arose for consideration was whether depreciation is to be computed on these assets u/s 10(5) (a) or u/s 10(5)(b) of the Indian Income Tax Act, 1922. It is true that the assessee had not claimed depreciation for the assessment year 1955-56. This, however, does not mean that the assets were acquired during the previous year under consideration. The assets having been acquired before the previous year involved, depreciation obviously requires to be computed u/s 10(5)(b) which reads thus:

"(5)... and ''written down value'' means - ...

(b) in the case of assets acquired before the previous year, the actual cost to the assessee less all depreciation actually allowed to him under this Act, or any Act repealed thereby, or under executive orders issued when the Indian Income Tax Act, 1886 (II of 1886), was in force."

Accordingly, the question is answered in the affirmative and in favour of the assessee. No order as to costs.