2006 (11) TMI 194

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..... together for disposal by this common judgment as the same substantial question of law is involved in all the cases. 2. The facts essential for disposal of these appeals are, in brief, that the respondent is a company carrying on the business of growing and manufacturing of tea and a regular taxpayer. The respondent filed returns for every assessment year mentioned above but the Income-tax Officer refused to accept the taxable income shown by the assessee. The Income-tax Officer assessed the income of the respondent higher than the total income reflected in the returns. Being dissatisfied by the assessment order of the Income-tax Officer, the respondent took the matter before the Commissioner of Income-tax (Appeals). Pending adjudication o .....

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..... llowable at the prescribed rate should have to be deducted in the assessee's case ?" 3. Heard Mr. U. Bhuyan, learned standing counsel, Income-tax Department, appearing for the appellant and also heard Mr. A. K. Saraf, learned counsel appearing for the respondent. 4. Learned counsel appearing for the appellant submits that the Income-tax Appellate Tribunal has committed an error in holding that only 40 percent. of the depreciation has to be deducted while determining the written own value of depreciable assets used in tea business. According to the learned counsel for the appellant, the Calcutta High Court has not laid down the correct legal proposition while passing the order in CIT v. Suman Tea and Plywood Industries P. Ltd. [1993] 204 I .....

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..... [1966] 60 ITR 156 (SC) and Madeva Upendra Sinai v. Union of India [1975] 98 ITR 209 (SC). In Nandlal Bhandari Mills Ltd.'s case [1966] 60 ITR 173, the apex court held that the portion of the depreciation which entered into the computation of income taxable under the Indian Income-tax Act, 1922, was depreciation which had been actually allowed. When 40 per cent. of the total income is taxable income, the depreciation actually allowed is only 40 per cent. of the depreciation though while computing the composite income, 100 per cent. depreciation was allowed. Following the observations laid down in the above apex court cases, the meaning of the expression "actually allowed" has been interpreted as follows : "The pivot of the definition of 'w .....

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