9911796707
TMI Blog1978 (9) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... ) itself and not under Expln. 2 to sec. 43(1) ? 2. Whether there was material for the Tribunal to hold that the Expln. 2 to s. 43 will not be applicable to the assessee's case unless the two alternative figures mentioned in the said Explanation are available ? 3. Whether the Tribunal was justified in holding that depreciation cannot be allowed on Rs. 18,928 ?" The assessee is a limited company, the shares of which are owned by the Government of Kerala, engaged in the manufacture of certain type of pipes. It received a fork lift as a gift from the United States of America. Though the article was received from United States of America, the assessee had to pay customs duty for bringing it into the frontiers of this country. The freight, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee and used for the purposes of the business or profession, the following deductions shall, subject to the provisions of section 34, be allowed-- ....... (ii) in the case of buildings, machinery, plant or furniture, other than ships covered by clause (i), such percentage on the written down value thereof as may in any case or class of cases be prescribed: Provided that where the actual cost of any machinery or plant does not exceed seven hundred and fifty rupees, the actual cost thereof shall be allowed as a deduction in respect of the previous year in which such machinery or plant is first put to use by the assessee for the purposes of his business or profession: Provided further that no deduction shall be allowed under this cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eciation allowable is only the lesser of the two amounts, viz., written down value and market value. Where, therefore, according to him, one of the amounts is not ascertainable, no depreciation can be claimed or allowed. Such, according to the counsel for the revenue, is the position disclosed in this case, as the previous owner, being a foreigner, is not an assessee, and the article in question would not have actual cost or value in his hands. Therefore, according to the revenue, the depreciation or deduction would not be allowable at all. The assessee countered this argument by contending that this mode of construction of the section would reduce it to a mockery and deprive the assessee of the concession granted by a taxing statute, and s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10(2)(vi) of the Indian I.T. Act, 1922, it was ruled that an assessee is entitled under s. 10 of the Indian I.T. Act, before cl. (c) was inserted in s. 10(5) in 1953, to depreciation allowance in respect of machinery or plant which is acquired by inheritance. "Actual cost to the assessee" would be the real value of the property at the time when he acquired it by inheritance. The principle of the decision of the Rangoon High Court in Solomon Sons case [1933] 1 ITR 324 was followed. These two cases evolved a principle as to how the "actual cost" to the assessee had to be worked out in a case where the assessee derived the property by inheritance or by bequest. Counsel for the assessee brought to our notice the decision of the Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X
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