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TMI Blog1972 (7) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... cuted by the liquidators of Guzdar Kajora Colliery Co. Ltd., all the colliery lands, hereditaments and premises, mines, minerals, powers and privileges and all other hereditaments together with the machinery thereon belonging to the latter company. It was stipulated in the deed of conveyance that the sale was to be effective from July 1, 1945. The consideration for the transfer was Rs. 6 lakhs and was allocated as follows : " (a) the value of the machinery plants stores including stock of goods grains coals at the pithead and other movable properties appertaining to the said colliery the property in which is capable of passing by delivery being Rs. 3,50,000 (b) the value of the buildings and structures belonging to the said colliery being Rs. 1,50,000 (c) the value of the rest of the properties appertaining to the said colliery not capable of being passed by delivery being Rs. 1,00,000" Soon after the assessee-company came into existence it took over the business from the vendor-company and claimed depreciation for the assessment year 1946-47 on the basis of the figures, the comparative statement of which is given in the statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ores had been written up, whereas the valuation of the non-depreciable assets like mines etc., had been written down. As regards the report of the expert, A. N. Mitter, dated September 1, 1945, he was unable to contact him in spite of making an effort to do so. The report made by the second expert, S. N. Mullick, dated October 19, 1955, and January 30, 1957, together with the clarification made by him on November 20, 1969, were considered by him. He also examined S. N. Mullick under section 37 of the Indian Income-tax Act, 1922, hereinafter called the "Act". He came to the conclusion that the vendor had been making good profits but no provision had been made for the good will of the company in the business and if such a provision had been made it would have worked out at Rs. 2,56,960 having regard to the profits made for the preceding four years. He made an allocation of Rs. 6 lakhs as follows : Rs. " (1) Goodwill 2,56,960 (2) Mines and development as per balance-sheet of M/s. Guzdar Kajora Colliery Co. Ltd. as at 30-6-45 2,48,323 (3) Stores and stock 60,744 and worked out the value of other depreciable assets ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch a course. Even on the question of valuation of the goodwill it was observed : " Further, it should be remembered that although the Income-tax Officer has made the valuation of the goodwill by working out the normally accepted method of taking the profits of the four preceding years, this method of calculation or this normal practice has not been challenged by the assessee. The revenue has examined all the relevant facts of the case including the reports of Mr. Mitter and Mr. Mullick and the Tribunal has agreed with those findings of facts and we do not think that we can interfere with those findings." The answer to the question referred was given in the affirmative. Learned counsel for the assessee has assailed the decision of the High Court on a number of grounds. It has been urged, inter alia, that the High Court had not kept in view the general and well-established principle that the statement with regard to valuation contained in a formal document should be, prima facie, accepted as correct. There can be no justification, it has been pointed out, for any court or Tribunal "to rip up a transaction not impeached as dishonest and not proved to be such, merely because t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... down value thereof as may in any case or class of cases be prescribed ; ..... Provided that--....... (c) The aggregate of all allowances in respect of depreciation made under this clause and clause (via) or under any Act repealed hereby, or under the Indian Income-tax Act, 1886 (II of 1886), shall, in no case, exceed the original cost to the assessee of the buildings, machinery, plant or furniture, as the case may be......" Keeping in view sub-section (5) of section 10 of the Act the original actual cost to the assessee of the asset with regard to which depreciation allowance is claimed has to be ascertained for the purpose, inter alia, of finding out the written down value in case of assets other than ocean going ships. For the purpose of getting the benefit of clause (c) of the proviso to sub-section (2)(vi) also the original cost has to be ascertained. The Privy Council laid down in Commissioner of Income-tax v. Buckingham Carnatic Co. Ltd. that the word "assessee" in section 10(2)(vi) of the Act refers to the person who owns the assets and who is being assessed and depreciation allowance has to be based on the original cost of such property to such person. This princi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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