Law: Income Tax Act, 1922

Section: 10(2)(vi)

ORDER [The order was passed by M.T. SIDDIQUI, President].-In these four appeals which were originally reported as time-barred the delay is being condoned on the ground that the position of law about the proper forum of appeal was not very clear and the appellant, at the same time filed appeals before the Appellate Assistant Commissioner which were in time. The Department also did not object to the condonation of the delay. The common objection in all the four years concerns the disallowance of initial and additional depreciation under the provisions of Section 10(2)(vi). The appellant is a shipping concern and it was argued that they were entitled to all the allowances permissible under the provisions of Section 10(2)(vi). The arguments advanced in this connection by both the sides are identical with those advanced in I.T.A. No. 1374 to 1377 of 1968-69, I.T.As. No. 1266, 1267, 1268 and 115 of 1967-68 and 1969-70 respectively I.T. As. No. 1429A, 1429B, 1429C, 1936, 1937, 1938, 1939 and 1940 of 1967-68 decided on 15-6-1970 and 16-6-1970 respectively etc. For reasons recorded therein we would hold that so far as the first two years are concerned the appellant would be entitled to the additional and initial depreciation for the same reasons that have been recorded in detail in these orders. 3. So far as the assessment years 1967-68 and 1968-69 are concerned we find that the Finance Act, 1967 brought about amendments in Section 10(2)(vi) whereby the initial allowances were restricted to assets installed in Pakistan and at the same time under Section 10(2)(vi)(d) the initial allowance was restricted to ships whose port of registration is in Pakistan. Since in the case of the appellant these two conditions are not fulfilled for the two years under consideration, the appellant would not be entitled to initial depreciation so far as these two years are concerned. 4. We shall now go to the appeals for the years 1966-67, 1967-68 and 1968-69 wherein the other common objections was about the exemption of the shipped income under Article III of the Convention for avoidance of double taxation between the Govt. of Pakistan and Japan and the prevention of fiscal evasion with…

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