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In Re: Swadeshi Cotton Mills Co., Ltd., - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtAllahabad
Decided On
Reported inAIR1929All70; 114Ind.Cas.897
AppellantIn Re: Swadeshi Cotton Mills Co., Ltd.,
Excerpt:
- .....limited, cawnpore. the question submitted for our answer runs as follows:2. was the engine in question sold or discarded in consequence of its having become obsolete within the meaning of section 10(2)(vii), income-tax act, 1922?3. the facts are given in the order of the learned assistant commissioner dated 16th january 1928 and are as follows:4. the swadeshi cotton mills company limited had a steam driven engine. so far back as in 1923 it was decided that it should be replaced (at such date as might be found convenient) on the ground that it had become obsolete. the machine was, however, not actually replaced although an electricity driven engine was provided. in september 1926 the engine actually broke down, and the question arose whether it should be repaired or not. within a few.....
Judgment:

Mukerji, J.

1. This is a case stated by the Commissioner of Income-tax at the instance of the Swadeshi Cotton Mills Company, Limited, Cawnpore. The question submitted for our answer runs as follows:

2. Was the engine in question sold or discarded in consequence of its having become obsolete within the meaning of Section 10(2)(vii), Income-tax Act, 1922?

3. The facts are given in the order of the learned Assistant Commissioner dated 16th January 1928 and are as follows:

4. The Swadeshi Cotton Mills Company Limited had a steam driven engine. So far back as in 1923 it was decided that it should be replaced (at such date as might be found convenient) on the ground that it had become obsolete. The machine was, however, not actually replaced although an electricity driven engine was provided. In September 1926 the engine actually broke down, and the question arose whether it should be repaired or not. Within a few days the company decided that it should not be repaired but should be sold. It was actually sold for 1,200 and odd. The question is whether the machinery was discarded because it was obsolete within the meaning of Clause (vii), Sub-section (2), Section 10, Income-tax Act.

5. As already stated, the machine had: been declared to be obsolete. It was discarded because two things happened. It was obsolete and it also broke down and it broke down past repairs. In the circumstances we are of opinion that the engine was sold in consequence of its having become obsolete within the meaning of Section 10(2)(vii), Income-tax Act, 1922. The costs of this reference will be paid by the Government.


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