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TMI Blog2000 (11) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... tners constituted by a document dated January 26, 1962, and thereafter there were withdrawals, retirements and introduction of new partners. The last one was on November 1, 1964. The assessee-firm claimed depreciation for the assessment year 1965-66 on the basis of the cost at which it took over the assets from the earlier firm on November 1, 1964. The Income-tax Officer took the view that this was a case of only a change in the constitution of the firm and hence the depreciation should be allowed only on the basis of the written down value arrived at in earlier years. But, however, the Appellate Tribunal took a different view holding that the depreciation should be allowed on the assets taken over by the new partnership at the enhanced rat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evelopment rebate at the lower rate of 15 per cent. for the assessment years 1974-75 and 1975-76. On appeal the Tribunal had taken a different view thereby allowing rebate in favour of the assessee. Hence, the reference. In the case of CIT v. Sundaram Spinning Mills [2000] 241 ITR 350, the apex court had considered the meaning of "textiles" and "yam". Item No. 21 of the Ninth Schedule states "textiles" (including those dyed, printed or otherwise processed) made wholly or mainly of cotton, including cotton yam, hosiery and rope". The Ninth Schedule was inserted by the Direct Tax Laws (Amendment) Act, 1974, with effect from April 1, 1975, but has been omitted by the Taxation Laws (Amendment and Miscellaneous Provisions) Act, 1986, with eff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure of 'textiles" as understood commonly. In fact, cotton is the first stage, next comes "cotton yam" which finally produces "textiles". But here we find that the Legislature intended to give the higher rate of initial depreciation even to the manufacture of goods which as commonly understood could not have been included as "textiles". So this entry has to be interpreted to subserve the intended objective of the Legislature. It is significant that "textiles" is included under two items. One under item No. 21 with which we are concerned and also under item No. 22. This latter item No. 22 includes entirely different goods than what are under item No. 21. Item No. 22, reads as under: "textiles (including those dyed, printed or otherwise proc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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