Law:

Section:

Section 84 [now section 80J] of the income tax act, 1961 read with rule 19 [now rule 19A] of the income-tax rules. 1962-Deductions-Profits and gains from newly established industrial undertakings-Whether initial depreciation allowable under section 32(1)(iv) should be excluded in arriving at written down value of assets for purposes of computation of capital employed under rule 19-Held, no Facts For the purposes of relief under section 84, the assessee-company claimed, in its return for the assessment year 1966-67, that in the computation of capital employed under rule 19 of the Income-tax Rules, the initial depredation allowable under section 32(1)(iv) should be excluded in arriving at the written down value of its assets. The ITO negatived this claim and held that the said initial depreciation should also be taken into account for this purpose. The AAC, however, agreed with the assessee and set aside the ITO's order and the Tribunal upheld the AAC's order. On reference: Held 1. The provisions of Chapter IV of the Act under which section 32 is to be found and those of Chapter VII in which section 84 is to be found, operate in different fields. While the former deals with deductions permissible in the computation of income, the latter provides for benefits from income-tax in cases of a specified type of industry. These two provisions will, therefore, have to be read independently of each other. 2. The exclusion of initial depreciation in the computation of written down value, which is con templated under clause(iv) of section 32(1) , is only for the determination of written down value under clause (ii) of section 32(1) and not for all purposes. The relevant provision cannot also be so read as to control the definitions of "written down value" under section 43( 6)(ii) which included all depreciation actually allowed and that of "depreciation" which included initial depreciation under section 32(1)(iv) as well, which were specifically adopted for the purposes of section 84, read with rule 19, for computing the capital employed, since under rule 19(6)(iv) the written down value was to be computed under section 43( 6), which in turn clearly specifies the written…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492