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Construction of words in rules relating to income tax computation under Schedule D for tramway tracks allowance. Analysis: The judgment pertains to the construction of specific words in the rules governing income tax computation under Schedule D, particularly in relation to tramway tracks allowance. The case involved a corporation that laid new tramway tracks and sought to claim wear and tear allowance for these tracks. The corporation had made expenditures on the tracks, including amounts received from agreements with other parties and grants from the government for employing unemployed individuals. The main issue was determining the "actual cost to the person" for the purpose of calculating the wear and tear allowance under Rule 6 of the Income Tax Act, 1918. The court analyzed the history of legislation related to depreciation allowances for plant and machinery, emphasizing the fundamental purpose of such allowances to compensate for the diminution in value of essential capital assets over time. The judgment highlighted a previous case involving ship depreciation allowances and subsequent amendments to the legislation to address concerns about the aggregate amount of allowances exceeding the actual cost of the asset. The court emphasized the importance of interpreting remedial sections broadly while considering the legislative intent and the plain meaning of the words used. The court specifically focused on the phrase "actual cost to the person" and its significance in determining the allowable wear and tear allowance. It deliberated on whether the source of funds used to acquire the asset should impact the calculation of the allowance. The judgment clarified that the "actual cost" should be accurately ascertained, irrespective of the funding source, and that the phrase "to the person" did not necessarily restrict the relief to the funds directly expended by the individual. The court underscored that the cost to the person encompassed all capital expenditures made for the asset, regardless of the funding origin, to ensure a fair and consistent application of the allowance provisions. Ultimately, the court concluded that the wear and tear allowance should be based on the actual cost incurred by the person carrying on the business, encompassing all relevant capital expenditures related to the asset. The judgment upheld the appeal, aligning with the Master of the Rolls and Finlay, J., and awarded costs to the appellants. The decision was unanimous among the noble and learned Lords, resulting in the allowance of the appeal.
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