COMMISSIONER OF INCOME TAX Vs. TIRETH PRAKASH

JUDGEMENT

(1.) THIS is a reference under Section 256 of the Income-tax Act, 1961 (hereafter referred to as "the Act"). The assessee is a railway contractor for building and general repair work under the Northern Railway. The assessment year is 1962-63. The relevant previous year ended on March 31, 1962.

(2.) THE assessee had purchased a motor truck for Rs. 30,000 in May, 1958. For the assessment year 1962-63, the income-tax Officer estimated the net income from this truck at Rs. 2,000. He observed that since net profit was being fixed, there was no question of allowing depreciation on the truck separately. At the same time the Income-tax Officer made calculation for ascertaining the written down value of the truck. According to the calculation, the written down value for the assessment year 1962-63 came to Rs. 13,360, and depreciation at the rate of 25 per cent. came to Rs. 3,340. THE assessee claimed deduction on account of depreciation at the figure of Rs. 7,500 on the basis of the cost price of the truck (Rs. 30,000). THE assessee's claim on this point was not accepted by the Appellate Assistant Commissioner. But, the Appellate Tribunal accepted the assessee's claim on this point. THE Tribunal held that depreciation should be calculated on Rs. 30,000 which was the cost price of the truck.

(3.) ANNEXURE "E" to the statement of the case is a copy of the Appellate Tribunal's order dated April 12, 1964. After referring to the decision of the Andhra Pradesh High Court the Tribunal observed that the principle of the case applies with equal force to the facts of the present case. It, therefore, appears that, according to the finding of the Tribunal, no depreciation was actually allowed in the present case in earlier assessment years, and possibly the present case is one of notional deduction.