Law: Income Tax Act, 1922

Section: 66(1)

JUDGMENT Sankar Prasad Mitra, J.-This is a reference under section 66(1) of the Indian Income-tax Act, 1922. The assessment years are 1952-53 to 1956-57, the corresponding accounting years being the calendar years 1951 to 1955. The assessee is the Netherlands Steam Navigation Co. Ltd. It is a non-resident company having business connections all over the world. It has a branch in Calcutta for its Indian business. It carried on business in the accounting years in question. It filed returns for each of the assessments concerned showing its taxable income computed on the basis of its annual accounts for its Indian trade, that is, for round voyages round the world but no particulars of the shipping trade were furnished. The Income-tax Officer computed the taxable business income for each year by employing the following formula : Indian trade profits x Indian port receipts Total port receipts. By Indian trade profits is meant the profits of round voyages in which Indian ports were touched by the vessels. It was agreed between the department and the assessee that this was the correct method of assessment. In so computing the profits in India in each year, the Income-tax Officer allowed depreciation admissible under the Indian Income-tax Act and the relevant Rules made thereunder. He did not, however, allow initial or additional depreciation in respect of some ships in any of the years on the finding that those ships were newly acquired by the assessee in the accounting years, prior to those in which they were brought for trading in Indian waters and were not, therefore, entitled to initial or additional depreciation. The Income-tax Officer computed the taxable profits by applying rule 33 of the Income-tax Rules. In other words, the Income tax Officer held that the assessee was entitled to initial depreciation and development rebate only on those ships which were entirely new and which were first brought into use in the Indian trade. The Income-tax Officer was of the view that as none of the concerned ships had been brought into use in the Indian trade in any of the years when they were new, the assessee was not entitled to its claim. With regard to additional…

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