Skip to content


Hukumchand Mills Ltd. Vs. Commissioner of Income-tax - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtMumbai High Court
Decided On
Case NumberIncome-tax Reference No. 78 of 1979
Judge
Reported in[1986]160ITR661(Bom)
ActsIndian Income Tax Act, 1922 - Sections 10(5)
AppellantHukumchand Mills Ltd.
RespondentCommissioner of Income-tax
Excerpt:
- .....in view of the facts and circumstances that the mill company has been charged to tax for the assessment years 1938-39 to 1949-50 under the status of 'non-residene' except for the assessment years 1940-41, 1941-42 and 1948-49, the provisions of paragraph 2 of the taxation laws (part b states) (removal of difficulties) order, 1950, could be invoked ?(3) whether the provisions of paragraph 2 of the taxation laws (part b states) (removal of difficulties) order, 1950, apply and were correctly applied to the facts of the case ?(4) whether, in view of the facts and circumstances of the case, paragraph 2 of the taxation laws (part b states) (removal of difficulties) order, 1950, is a legal and valid piece of legislation ?'2. the counsel agreed that as far as question no. 1 is concerned, in.....
Judgment:

Kania, J.

1. The following four questions have been referred to us in this reference for our determination :

'(1) Whether, in view of the facts and circumstances, the company is entitled to depreciation on the original cost as on January 1, 1949, for the assessment year 1950-51, that is, the original cost should be taken as written down value and depreciation be allowed on such original cost and the written down value for subsequent years be arrived at by reducing the block, that is, assets by depreciation on such written down value ?

(2) Whether, in view of the facts and circumstances that the mill company has been charged to tax for the assessment years 1938-39 to 1949-50 under the status of 'non-residene' except for the assessment years 1940-41, 1941-42 and 1948-49, the provisions of paragraph 2 of the Taxation Laws (Part B States) (Removal of Difficulties) Order, 1950, could be invoked ?

(3) Whether the provisions of paragraph 2 of the Taxation Laws (Part B States) (Removal of Difficulties) Order, 1950, apply and were correctly applied to the facts of the case ?

(4) Whether, in view of the facts and circumstances of the case, paragraph 2 of the Taxation Laws (Part B States) (Removal of Difficulties) Order, 1950, is a legal and valid piece of legislation ?'

2. The counsel agreed that as far as question No. 1 is concerned, in view of the decision of the Supreme Court in the case of Hukumchand Mills Ltd. v. CIT : [1967]63ITR232(SC) , the question will have to be answered as follows :

(1) Only that part of the depreciation which entered into the computation of the taxable income of the assessee under the Indian Income-tax Act, 1922, for the assessment years prior to 1950-51 could be treated as depreciation 'actually allowed' and not the total depreciation which went into the computation of its total world income.

3. As far as questions Nos. 2 and 3 are concerned, the counsel agreed that they will have to be answered in the negative and against the Revenue in view of our decision just delivered in Income-tax Reference No. 84 of 1975 [CIT v. Hukumchand Mills Ltd. : [1986]160ITR650(Bom) ]. Question No. 4 has been raised at the instance of the assessee and Mr. Vyas states, on instructions, that he does not desire that the said question should be answered. In view of this, we decline to answer the said question.

4. There will be no order as to the costs of this reference.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //