SAHARANPUR ELECTRIC SUPPLY COMPANY LIMITED PATNA ELECTRIC SUPPLY COMPANY LIMITED TINNEVELLY TUTICORIN ELECTRIC SUPPLY COMPANY LIMITED PATNA ELECTRIC SUPPLY COMPANY LIMITED MUZAFFARPUR ELECTRIC SUPPLY COMPANY LIMITED AHMEDABAD ELECTRICITY CO LIMITED Vs. COMMISSIONER OF INCOME TAX:COMMISSIONER OF INCOME TAX WEST BENGAL:COMMISSIONER OF INCOME TAX WEST BENGAL:COMMISSIONER OF INCOME TAX WEST BENGAL:COMMISSIONER OF INCOME TAX WEST BENGAL:COMMISSIONER OF INCOME TAX BOMBAY:COMMISSIONER OF INCOME TAX WEST

JUDGEMENT

(1.) The appellants are all electric supply undertakings situated in various parts of the country. All the appeals relate to the assessment year 1962-63 or later. They raise a common question regarding the computation of depreciation on service lines installed by the assessees, a part of the expenditure incurred in connection with the installation of which is recovered by the assessees from consumers of electricity.

(2.) Depreciation, under the Income-tax Act, is computed as a percentage of the "written down value" of the asset in question. The Income-tax Act, 1961 came into force on 1-4-1962. Section 43(6) of the Act defines "written down value" thus:

(3.) It will be seen from the main paragraph of sub-section (l) of Section 43 that it does not really define what is meant by the actual cost of an asset to the assessee; it only contains a gloss that, whatever the expression may mean, that figure has to be reduced by that portion of it, if any, as has been met directly or indirectly by any other person or authority. The question before us arises partly due to this circumstances and partly due to the earlier legislative history of these provisions.