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Issues:
1. Calculation of depreciation and development rebate based on the difference in the rupee value of machinery. 2. Computation of deficiency for assessment years under section 80J using rule 19A versus rule 19 of the Income-tax Rules, 1962. Analysis: 1. The first issue pertains to whether the difference in the rupee value of machinery, calculated due to currency devaluation, should be considered as part of the actual cost of plant and machinery for depreciation and development rebate purposes. The court referred to a previous case where a similar question was answered in favor of the assessee. The court, based on the previous ruling, also ruled in favor of the assessee on this issue. 2. The second issue involves the computation of tax concessions for newly established industrial undertakings under section 80J. The court explained the historical context of the relevant provisions, highlighting the transition from section 84 to section 80J. Section 80J allows for the deduction of profits and gains based on the capital employed in the industrial undertaking. The computation of capital under rule 19A, which considers the value of assets on the first day of the relevant accounting year, differs from rule 19, which calculates the average capital during the accounting year. The court emphasized that for the assessment year 1968-69, the tax concession had to be computed in accordance with section 80J and rule 19A. The court upheld the Income Tax Officer's decision to recomputed the tax concession for the previous year based on rule 19A for setting off against profits and gains in the subsequent year. In conclusion, the court ruled in favor of the assessee on the first issue regarding depreciation and development rebate calculation, and in favor of the revenue on the second issue concerning the computation of deficiency under section 80J using rule 19A. The court directed each party to bear their own costs due to conflicting outcomes on the issues.
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