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TMI Blog1980 (3) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... value of Rs. 61,172 had not been actually used during the relevant previous year. He, therefore, declined to grant relief pertaining to the same and allowed only Rs. 36,441 by way of relief s. 84 The assessee had also claimed a set-off of Rs. 55,752 representing the loss for the assessment year 1964-65, but that was also not allowed and the ITO determined the total income at Rs, 6,07,368. The assessee preferred an appeal to the AAC contending that he should have been allowed relief under s. 84 in respect of Rs. 61,782 as being the value of machinery and that the ITO should also have set off Rs. 55,752 being the,loss assessed for the assessment year 1964-65, but the AAC did not accept both the contentions and confirmed the order of the ITO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment year 1966-67. At the instance of the revenue, the following two questions have been referred : " (a) Whether, on the facts and in the circumstances of the case, the assessee was entitled to relief under section, 84 of the Income-tax Act, 1961, on Rs. 45,857 in the assessment for the assessment year 1966-67, if it is found that it had purchased machinery of that value in the year earlier to the computation period, even though it had not been used during the relevant previous year ? (b) Whether, on the facts and in the circumstances of the case, the unabsorbed depreciation of the assessment year 1965-66 should be set off against the income of the assessee for the assessment year 1966-67 to the extent it was not adjusted the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on period " were substituted. The written down value is defined in s. 43(6) as follows : " (a) in the case of assets acquired in the previous year, the actual cost to the assessee ; (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depreciation actually allowed to him under this Act, or under the Indian Income-tax Act, 1922 (XI of 1922), or any Act repealed by that Act, or under any executive orders issued when the Indian Income-tax Act, 1886 (11 of 1886), was in force .........." The proviso and the Explanations which are unnecessary are omitted. In this definition, in view of r. 19(6), the previous year will have to be read as computation period. The argument of the learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asset acquired on or after the commencing date of the computation period, the rule requires that the average cost during the said period is to be taken and with reference to the definition of average cost the capital employed will have to be determined at such proportion of the actual cost thereof as the number of days of the computation period during which such asset is used in the business bears to the total number of the days comprised in the said period. Thus, in a case where an asset was acquired on or after the commencing date, the capital employed is determined with reference to the number of days during which the asset was used is taken into account and there should be no reason why a similar construction cannot be made in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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