Law: Income Tax Act, 1922

Section: 10(2)(vi)(a), (b), (c)

Law: Wealth Tax Act, 1957

Section: 7(2)(a)

Wealth tax-Initial and additional depreciation-Nature of Whether can be taken in for determining value of assets-Indian Income-tax Act, 1922, Ss. 10(2)(vi)(a), (b), (c) & 10(2)(via) Wealth Tax Act, 1957, S. 7(2)(a). The depreciation referred to in sections 10(2)(vi)(a), (b) and (c) and 10(2)(via) of the income-tax Act, 1922, cannot be allowed in computing the net value of the assets under section 7(2)(a) of the Wealth Tax Act, 1957. Commissioner of Wealth Tax v. Swadeshi Cotton & Flour Mills Ltd. (1968) 69 I T R 539 fol.   JUDGMENT DIXIT C. J.-This consolidated reference under section 27(1) of the Wealth Tax Act, 1957 (hereinafter referred to as the "Act"), by the Appellate Tribunal at the instance of the assessee, Central India Machinary Manufacturing Co. Ltd., Gwalior, arises out of the Tribunal's orders disposing of the assessee's appeals arising out of the wealth tax assessment proceedings for the years 1957-58 and 1958-59. The question which the Tribunal has placed before us for decision and which is common to the two references is as follows: "Whether, on the facts and in the circumstances of the case, the initial and additional depreciation granted under sec tions 10(2)(vi)(a), (b), (c) and 10(2)(via) should be allowed for computing the net wealth of the assessee?" The material facts are that the assessee carries on the business of manufacturing automatic looms for textile industry and other machinery components used in weaving and finishing processes in textile industry. In the balance-sheets of the company, valuation of assets as on the valuation date was shown at Rs. 98,94,881 for the assessment year 1957-58 and Rs. 1,14,36,560 for the assess ment year 1958-59. In the balance-sheets the assessee had made no deduction on account of depreciation. The Wealth Tax Officer, therefore, rejected the claim of the assessee that the valuation of its assets for the purposes of its assessment to wealth tax should be made after allowing depreciation according to the provisions of the Income-tax Act, 1922. In the appeals which the assessee then preferred the Appellate Assistant Commissioner took the view that, even though no…