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1989 (5) TMI 53 - SC - Income TaxWhether the depreciation for the previous years should have been calculated only on the basis of clause 2 of the Taxation Laws (Part B States) (Removal of Difficulties) Order, 1950, which provided for computation of the aggregate depreciation allowance on the basis of the deduction which was actually allowed under the provisions of the Saurashtra Income-tax Ordinance, 1949 ? Held that:- As observed in the case of CIT v. Dewan Bahadur Ramgopal Mills Ltd. [[1960 (11) TMI 12 - SUPREME Court] the basic and normal scheme of depreciation under the Indian Income-tax Act is that it decreases every year, being a percentage of the written down value which in the first year is the actual cost and in succeeding years actual cost less all depreciation actually allowed under the Indian Income-tax Act or any Act repealed thereby, etc, In that case, an anomalous situation arose because the Hyderabad Income-tax Act was not repealed by the Indian Income-tax Act but by the Finance Act, 1950, and hence, a difficulty arose in allowing depreciation to an assessee in a Part B State. In the present case also, the Saurashtra Income-tax Ordinance having been repealed not by the Indian Income-tax Act but by section 13 of the Finance Act, 1950, a similar difficulty had come into existence, and hence we fail to see how it can be said that the Government had no good basis to come to the conclusion that a difficulty had, in fact, arisen as contemplated in the case of Dewan Bahadur Ramgopal, Mills Ltd. Unable to accept the submissions of Mr. Salve, learned counsel for the assessee that the decision of this court in CIT v. Dewan Bahadur Ramgopal Mills Ltd. [supra] was not good law or, at least, that it needed reconsideration by a larger Bench, we must follow that decision and the appeal of the assessee must be dismissed.
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