9911796707
TMI Blog1964 (8) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... accordingly state an agreed case and refer it to the High Court. 2. The assessee is a private limited company, carrying on the business of supply of electricity. It has been granted a licence by the Government. Under the terms of the licence the assessee was to lay free of charge 100 ft. of service lines from its nearest distribution main outside the limits of the property in respect of which the requisition for connection of electricity is made. Any length in excess of 100 ft. and the whole of the service lines within the limits of the property in respect of which the electricity is to be supplied has to be paid for by the consumer. The service line, notwithstanding that a portion of the cost has been paid for by the consumer, was to rem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er assessee. He held that the assessee was entitled to depreciation on the entire service connection installed by the company for consumption of electricity by the consumer and that in calculating the cost of such installation the amount recouped from the consumers in respect of such service installation should not be taken into account and that the assessee was entitled to depreciation on the actual cost incurred by it, irrespective of whether a portion had been recouped from the consumer or not. Copies of the orders of the Appellate Assistant Commissioner are annexures "B"&"B-1" and form part of the case. 6. The department appealed to the Tribunal. 7. The Tribunal upheld the Appellate Assistant Commissioner's dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the assessee-company is entitled to the allowance of depreciation and development rebate in respect of that portion of the service line towards the construction of which the consumer has contributed amounts in cash?" The assessee is the Cochin Electric Company (Private) Limited, Cochin. It is common ground that the cost of the service lines has been met in accordance with the provisions of rule 6 of annexure VI to the Indian Electricity Rules, 1956. The rule says: "The licensee shall lay free of charge 30.48 meters (100 feet) of service line from his nearest distribution main outside the limits of the property in respect of which the requisition is made. Any length in excess of 30.48 meters (100 feet) as defined above and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .R. 622 and the decision of the High Court of Patna in Commissioner of Income-tax v. Ranchi Electric Supply Co. Ltd. [1954] 26 I.T.R. 89. are both against this contention. Both the decisions follow the decision in Corporation of Birmingham v. Barnes [1935] 19 Tax Cas. 195; 3 I.T.R. (Eng. Cas.) 26. In that case Lord Atkin said: "The word 'actual' itself gives me no assistance. It serves, as Mr. Latter suggested, to give emphasis to the word following. It is to be cost, the whole cost, and nothing but the cost. It removes any question of estimate, and in cases where the plant has been purchased for a lump sum together with factory premises it may give rise to a difficult question of fact. The word 'actual' is used in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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