RAJA BAI NIKKAM Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) IN this reference under section 256(1) of the INcome-tax Act, 1961, made at the instance of the assessee, the question referred is :

(2.) THE relevant facts and circumstances are the following :

(3.) THE question of depreciation in the matter of computing business income and its subsequent dealing, when the assets in respect of which the same had been allowed came to be realised with a certain known result, was originally dealt with in section 10 of the Act of 1922. THE topic is now dealt with in two different sections under the new Act, namely sections 32 and 41. THE former deals with rules for the purpose of deducting depreciation before computing business income. THE latter in its second sub-section deals with a position arising out of realisation of the asset by sale or otherwise in respect of which the depreciation had already been allowed by way of deduction. THE old proviso to section 10(2) (vii) of the Act of 1922, dealing with the topic, read as follows :