MIR MOHAMMAD ALI Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE first of the two questions referred to this Court under S. 66(1) of the IT Act was :

(2.) THAT factually the assessee paid Rs. 12,541 in the first year (the account year ending with 31st March, 1949, Rs. 20,851 in the second year and Rs. 40,302 in the third year towards interest on the loans he had contracted was apparently accepted by the Tribunal. What was ultimately allowed by the Tribunal as deduction was Rs. 8,000 in the first year, Rs. 14,000 in the second year and Rs. 13,000 in the third year. The questions is whether the claim of the assessee should have been allowed in full.

(3.) THE relevant facts were not in dispute. In the year of account ending 31st March, 1950, the assessee replaced the petrol driven engine in two of his buses MDJ 593 and MDJ 723 by new diesel engines and he incurred an expenditure of Rs. 18,544 on the purchase of these two diesel engines. He claimed deductions for the depreciation allowances permitted by para (1) of S. 10(2)(vi) of the Act (normal or initial depreciation), para (2) of S. 10(2)(vi) of the Act (additional or extra depreciation) and by S. 10(2)(via) (additional and special depreciation). The claim for normal depreciation was allowed by the ITO himself, but he disallowed the claims under the other two heads, and that disallowance was ultimately confirmed by the Tribunal. The question as it has been framed by the Tribunal would appear to refer only to the disallowance of the claim under S. 10(2) (via) and not the disallowance of the claim under para (2) of S. 10(2)(vi). Quite obviously, it was an accidental slip, because what the Tribunal stated in its order on appeal was :