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Section 15C of the Indian income-tax act, 1922 [Corresponding To Section 80j of The Income-Tax Act, 1961]-Deductions-Profits and gains from newly established industrial undertaking-Whether, for purpose of computing capital employed, written down value of fixed assets had to be worked out without deducting therefrom initial depreciation allowed under section 10(2)(vi) of the 1922 Act-Held, yes Facts For the assessment year 1956-57, the ITO computed the capital employed for the purpose of granting relief to the assessee under section 15C of the 1922 Act of the basis of written down value of fixed assets as on 1-1-1955 as reduced by initial depreciation allowed on them under section 10(2)(vi ) of the 1922 Act. On appeal, the AAC held that the written down value had to be worked out without deducting therefrom the initial depreciation. On further appeal, the Tribunal upheld the AAC's order, observing that only when the asset was sold or when the aggregate of all the allowances including that of initial depreciation exceeded the original cost, would initial depreciation be taken into account, and that otherwise the provisions of section 10(2)(vi) clearly enjoined upon the ITO not to take initial depreciation into account. On reference: Held On a combined reading of the provisions of sections 15C, 10(2 )(vi) and 10(5) of the 1922 Act, it is obvious that the initial depreciation should not be deducted from the written down value for the purpose of computing capital employed in an industrial undertaking for giving relief under section 15C of the 1922 Act. Case review P.K. Badiani v. CIT [1976] 105 1TR 642 (SC), Burmah-Shell Refineries Ltd. v. C.B. Chand, ITO [1968] 67 1TR 653 (Bom.) and CIT v. Lucas TVS Ltd. (No. 1) [1977] 110 ITR 338 (Mad.) followed. Cases referred to P.K. Badiani v. CIT [1976] 105 ITR 642 (SC), Burmah-Shell Refineries Ltd. v. G.B. Chand, ITO [1968] 67 ITR 653 (Bom.),CIT v. Lucas-T.V.S. Ltd. (No. 1) [1977] 110 ITR 338 (Mad.), Asoka Mills Co. Ltd. v. CIT [1958] 33 ITR 377 (Bom.), Motor House (Gujarat) Ltd. v. CIT [1963] 48 ITR 419 (Bom.) and Popular Ltd. v. CIT [1955] 28 ITR 309 (Mad.). Judgment Sabyasachi Mukharji J.-This reference under section…

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