Law:

Section:

JUDGMENT Dixit, CJ.-In this reference under section 66(1) of the Income-tax Act, 1922, at the instance of the assessee the four questions of law referred to this court arise out of a common order of the Income-tax Appellate Tribunal, Bombay, disposing of four appeals relating to the assessment years 1950-51,1951-52,1952-53 and 1953-54, the corresponding accounting years being the years ending on 31st December, 1949, 31st December, 1950, 31st December, 1951, and 31st December, 1952, respectively. The assessee is a public limited company owning and running a textile mill at Indore and some ginning factories. Till the extension of the Indian Income-tax Act, 1922, to Part B States, the company was assessed in Companies Circle, Bombay, in some years as a non-resident company and in some years as a resident company. It was also assessed in the former Indore State under the Indore Industrial Tax Rules, 1927. After the extension of the Indian Income-tax Act to Part B States, the company was assessed for the first time for the assessment year 1950-51. In those assessment years, the assessee asked for the grant of depreciation allowance in respect of its assets such as building, machinery, plant, etc. and so the question of computing the written down value of its assets as on 1st January, 1949, in accordance with the provisions of section 10(5) of the Act read with the Taxation Laws (Part B States) (Removal of Difficulties) Order, 1950, arose for determination. In working out the written down value for 1st January, 1949, the Income-tax Officer applied the proviso to the second paragraph of the Order of 1950, and took into account the greater of the depreciation allowances allowed under the Indian Income-tax Act and in the assessments made at Indore. On this basis for the years ending up to the accounting year 1944, the figures of depreciation allowance under the Indian Income-tax Act were taken and the written down value for 1st January, 1945, as computed under the Income-tax Act was arrived at. Thereafter for the subsequent four years the depreciation allowed under the Indore Industrial Tax Rules, 1927, was taken into account under the aforesaid proviso and deducted…

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