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TMI Blog1960 (9) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... in the affirmative, whether the said loss is ₹ 78 or ₹ 708 or another sum ?" The circumstances leading to this reference may be briefly stated. The assessee family is a dealer in tobacco. A new Vauxhall motor-car was purchased by this family on December 12, 1952, for ₹ 13,144 for the use partially of the family business and partially for non-business purpose, such as personal requirements of the members of the family. The accounts of the business were made up for the year ending with March 31 of every year. For the assessment years 1953-54, 1954-55 and 1955-56, the Income-tax Officer made allowance of depreciation under sections 10(2)(vi) and 10(2)( vi-a). The car was sold for ₹ 4,025 on August 22, 1955, i.e., ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 66(1). The point that calls for decision here is whether the written down value of the vehicle should be arrived at after taking into account the normal depreciation and additional depreciation to which an assessee is entitled under section 10(2), clauses (vi) and (vi-a) or the depreciation allowance that is actually allowed to him by reason of section 10(3) of the Act. This depends upon the language of section 10(2), clauses (vi ), (vi-a), (vii), section 10(3), and section 10(5)(a) and (b). "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 .... to s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alled and falling within the period commencing on the 1st day of April, 1949, and ending on the 31st day of March, 1959;... (vii) in respect of any such building, machinery or plant which has been sold or discarded or demolished or destroyed, the amount by which the written down value thereof exceeds the amount for which the building, machinery or plant, as the case may be, is actually sold or its scrap value:... (3) Where any building, machinery, plant or furniture in respect of which any allowance is due under clause (iv), clause (v), clause ( vi) or clause (vii) of sub-section (2) is not wholly used for the purposes of the business, profession or vocation, the allowance shall be restricted to the fair proportional part of the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is a bit complicated by reason of the existence of section 10(3) which restricts the allowance admissible under clauses (iv), (v), (vi ) or (vii) of sub-section (2), when the asset envisaged therein is not wholly used for the purposes of the business, profession or vocation, to the fair proportional part of the amount which would be allowable if such building, machinery, plant or furniture was wholly so used. It is this sub-section that impelled the Tribunal to take the view that the entire depreciation allowance calculated at rates mentioned in the two clauses should be taken into account in computing the written down value. The Tribunal thought that an assessee situated in that position would be deriving an undue advantage if only the all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issible under those clauses were to be taken into account, surely it would have used appropriate language to convey that thought. We cannot assume that the Legislature was not aware of the distinction between "depreciation allowable to an assessee" and "depreciation allowed to him", as used in clause (b) of section 10(5). That the Legislature is aware of this difference is apparent from the language used in the proviso to clause (b). It is worthy of note that in the proviso the Legislature indicated the meaning of "written down value" in that clause by appropriate language, namely, "'written down value' means the actual cost to the assessee reduced by an amount equal to the depreciation calculated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 10(3) makes it plain that such a theory cannot be sustained. It is not the division of the asset as being used for business and non-business purposes that is contemplated by the section but only apportionment of the depreciation allowance as between the use of it for business purposes and its use for non-business purposes. However, that need not detain us any longer as we are not convinced that such a proposition can be sustained either on the language of any section or on authority. If that were the correct view, we think that the Income-tax Officer could not adopt a different basis for the assessment year 1956-57 by taking into consideration the whole of the depreciation allowance permissible under clauses (vi) and (via ). Adopt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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