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TMI Blog1960 (4) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer allowed an initial depreciation to the extent of ₹ 400. He took into account the fact that the car was used for four months in the year and so the proportionate allowance should be one-third. The Income-tax Officer also took into account the circumstance that the car was also used for private purposes. The Income-tax Officer therefore held that deduction should be half for business purposes since the other half was for personal use. According to the Income-tax Officer the initial depreciation was 50 per cent, of ₹ 2,400, and one-sixth of this amount, namely, ₹ 400, was the proper amount of deduction to be allowed for initial depreciation. When the matter came up in appeal the Appellate Assistant Commissioner took the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by him at the sum of ₹ 1,200. We think that the submission of learned standing counsel is well founded and must be accepted as correct. The question of initial depreciation is dealt with in section 10(2)(vi) which reads as follows: 10. (2) Such profits or gains shall be computed after making the following allowances, namely: (vi) in respect of depreciation of such buildings, machinery, plant, or furniture being the property of the assessee, a sum equivalent, where the assets are ships other than ships ordinarily plying on inland waters, to such percentage on the original cost thereof to the assessee as may in any case or class of cases be prescribed and in any other case, to such percentage on the written down value thereof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the provision of initial depreciation to be given to the assessee under section 10(2)(vi) is controlled by the language of section 10(3) of the Act which expressly restricts the allowance to the fair proportional part of the amount which would be allowable if the machinery was wholly used for the purposes of the business, in the case where the machinery is not wholly used for the purposes of the business but is used both for the purposes of the business and for private purposes. For these reasons, therefore, we hold that the view taken by the Appellate Tribunal in this case is erroneous in law and the assessee is entitled to a sum of ₹ 1,200 as initial depreciation for the assessment year 1952-53, and the view taken by the Appel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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