TMI Blog1965 (12) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... Order, 1949, did not include any notional allowance and we must interpret the, words "actually allowed" occurring in section 10(5)(b) of the Act in the same manner. The Explanation inserted by the 1962 Order has no bearing on the facts of this case. The exemption granted by the Central Government is granted under paragraph 15 of the Merged States (Taxation Concessions) Order, 1949, which was itself issued under section 60A of the Act. The result is that the exemption was granted under the Act and not under any agreement. The case of the assessee must be determined with reference to section 10(5)(b) of the Act, unaffected by the amendment made by the 1962 Order. Appeal dismissed. - C.A. 956 OF 1964 - - - Dated:- 3-12-1965 - Judge(s) : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecision of the Government in his letter dated March 8, 1952, to exempt the company from income-tax and super-tax for a period of five years with effect from April 1, 1950. It was, however, stated that the shareholders of the company would be liable to pay tax on the amount of dividend received by them. The Merged States (Taxation Concessions) Order, 1949, was issued by the Central Government in exercise of the powers conferred by section 60A of the Indian Income-tax Act, 1922, hereinafter referred to as the Act, and section 23A of the Business Profits Tax Act, 1947. Paragraph 15 of the said order provides as follows : " 15. (1) Where any industrial undertaking situate in a merged State claims that it has been granted any exemption fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer, however, rejected this contention and held that depreciation must be computed on the written down values of machinery computed as if the income of the assessee had been worked out properly in the years when the company was exempted and the depreciation being allowed at the usual rates. The assessee failed before the Appellate Assistant Commissioner and the Appellate Tribunal. The Appellate Tribunal held that the words "actually allowed" in section 10(5)(b) of the Act were wide enough to cover the case of the assessee. The High Court, however, held that if in the prior years no depreciation had been actually allowed then the actual cost incurred by the assessee for acquiring the machinery would be the written down value of the mach ..... X X X X Extracts X X X X X X X X Extracts X X X X
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