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TMI Blog1970 (9) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... ss cost or on the net amount (gross expenditure less reimbursement) ? " Learned counsel for the parties are both agreed that the answer to the first question is concluded by the decision of their Lordships of the Supreme Court in Commissioner of Income-tax v. Raju and Mannar. In accordance with that decision we return the answer to the first question in the affirmative and against the revenue. It is, therefore, necessary to advert to matters relevant to the second question only. The assessee--The Ambala Cantt. Electric Supply Co. Ltd. is a private limited company, carrying on the business of generation and distribution of electricity. The relevant assessment years are 1958-59 and 1959-60. During the years above-said there was expansion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was a binding precedent directly on, the point and accordingly held that the depreciation was to be allowed on the entire gross cost. Mr. D. N. Awasthy, on behalf of the revenue, first referred to clause 2 of the specimen agreement between the consumers and the assessee-company (annexure " D ") which provides that the consumers would pay on demand the cost of so much of a service-line as may be necessary for the purpose of the connection beyond 100 feet from the company's distributing main and also of any service-lines which may be laid or placed for the purpose of supply upon the premises of the consumers, Learned counsel then pointed to clause VI, sub-clause (2) of the Schedule to the Indian Electricity Act, 1910. This provides that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of these facts that the Division Bench opined that the consumer had paid for the service-line and, unless there was anything to the contrary in any particular case, property normally belonged to one who paid for it. The Bench noticed the observations to the contrary in Delhi Electric Supply and Traction Co. Ltd. v. Narsi Ram, but preferred to rest its decision on principle. It is patent that the above authority is not under any taxing statute. The particular provisions of the Income-tax Act which are adverted to hereafter did not even remotely arise for consideration or construction therein. The issue was altogether remote from that which exists in the present case. Consequently, we are of the view that the case above-said affords no usefu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ness, profession or vocation ; and 'written down value' means....." In the light of the foregoing provisions the crux of the question, therefore, is whether the development rebate to the assessee-company is to be allowed on the "actual cost" incurred by it for the installation of the main service-lines, switch gears, etc., or whether the same has to be allowed after deducting the amount of reimbursements made to it by the consumers. The answer to this question would turn on the meaning to be attributed to the words "actual cost or actually paid" as used in the provisions above said. An identical question, arising from an interpretation of similar language, arose before the House of Lords in Corporation of Birmingham v. Barnes. In that c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mised or given the money which recoups him what he has spent. In the present case the Corporation paid the whole of the cost of the tramways out of their funds unless the first half of the Dunlop contribution was so applied : as to which there is no evidence, nor is it material. I myself should not have thought the answer of Birmingham Corporation to the question put by Lord justice Romer would have been what he suggests. On the hypothesis that the Dunlop company had recouped the, corporation the whole of the cost of the first tramway. I should have thought the answer to 'What did it cost you ?' or 'What did it actually cost you ?' would have been 'It actually cost us pound 54,752 but none of the burden of that cost will fall on the corpora ..... X X X X Extracts X X X X X X X X Extracts X X X X
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