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TMI Blog1962 (7) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... year 1927. It had been carrying on business of assembling cars and trucks and was also dealing in cars, trucks, etc. For the purpose of its business, it acquired extensive lands in the year 1946. The assessee thereafter constructed buildings, workshops and installed machinery therein, etc. It appears that in the year 1948, another company also was incorporated for doing similar business. In about October, 1949, an agreement took place between that company and the assessee company, whereunder the assessee company agreed to sell and the other company agreed to buy all lands, constructions, buildings, plants, etc., from the assessee company for a consideration of ₹ 35 lakhs - 8 lakhs being the value of moveables and 27 lakhs being the v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quently, it follows that larger the written down value the smaller will be the margin of profits. The written down value is defined in sub-section (5) of section 10 of the Act. Clause (a) deals with the written down value of assets acquired before the previous year and clause (b) relates to cases of assets acdquired before the pevious year. As the assessee company had been running the business for some time, we are concerned with clause (b), and it is in the following terms : (b) in the case of assets acquired before the previous year the actual cost to the assessee less all depreciation actually allowed to him under this Act, or any Act repealed thereby, or under executive orders issued, when the Indian Income-tax Act, 1886 (II of 1886 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion therefore has been referred to us. 6. Mr. Dwarkadas, who appears for the assessee, presses the said contention of the assessee before us for out acceptance and in support of his contention has placed strong reliance on the clause which shall however not be deductible in determining the written down value for the purposes of this clause occurring in the latter part of clause (vi) of sub-section (2) of section 10 of the Act. In our opinion, the contention is not well founded and the clear terms of the latter part of clause (vi) read together with clause (b) of sub-section (5) of section 10 are sufficient to overrule the contention. The material part of clause (vi) is in the following terms : (2) Such profits or gains shall be com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -section (2) of section 10. The clause on which reliance is placed, therefore, would not come in the way of the income-tax authorities in including the initial depreciation for determining the written down value under the second proviso to clause (vii) of sub-section (2) of section 10. Further, no doubt is left in the matter when one turns to clause (b) of sub-section (5) of section 10 of the Act and it in clear terms says that the written down value means the actual cost to the assessee less all depreciation actually allowed to him under the act. It cannot be disputed that the initial depreciation had been actually allowed to the assessee. It also cannot be disputed that the initial depreciation allowed to the assessee is allowed under the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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