Law: Income Tax Act, 1922

Section: 10(2)(vii)

Section 41 read with section 32 of the Income-tax Act, 1961 [Corresponding to section 10(2)(vii) read with section 10(2)(vi)(d) of the Indian Income-tax Act, 1922] - Balancing charge - Whether initial depreciation allowed under section 10(2)(vi)(a) of 1922 Act has to be taken into account in ascertaining written down value for purpose of computing profits under section 10(2)(vii) of 1922 Act - Held, yes FACTS In a reference, a question of law as to whether in computing written down value for purposes of second proviso to section 10(2)(vii) of 1922 Act initial depreciation allowed under section 10(2)(vi) of 1922 Act was to be included was referred. HELD In view of the decision of the High Court in Esthuri Aswathtiat v. CIT [1963] 50 ITR 764 , the initial depreciation allowed under section 10(2)(vi )(a) of 1922 Act should be taken into account in ascertaining the written down value for the purposes of computing the profit under section 10(2)(vii ) of 1922 Act. Note: The case was decided against the assessee.…

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