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Issues:
1. Interpretation of the term "all depreciation actually allowed" in section 10(5)(b) of the Indian Income-tax Act. 2. Applicability and correct application of paragraph 2 of the Taxation Laws (Part B States) (Removal of Difficulties) Order, 1950. Analysis: 1. The first issue revolves around determining the written down value of the assessee's assets for the assessment years 1950-51, 1951-52, and 1952-53. The primary contention was whether the term "all depreciation actually allowed" in section 10(5)(b) refers to depreciation deducted in arriving at taxable income or world income. The assessee argued that since no specific amount was deducted for depreciation in prior years, the written down value should be taken at the cost of the assets. However, the Tribunal held that the depreciation which entered the computation of taxable income should be considered as actually allowed. The Court agreed with the Tribunal's view, emphasizing that the full depreciation was not entirely allowed in prior years but only a fraction of it entered the taxable income calculation, supporting the Tribunal's decision with a precedent from the Madhya Pradesh High Court. 2. The second issue pertains to the applicability of paragraph 2 of the Taxation Laws (Part B States) (Removal of Difficulties) Order, 1950. The Tribunal directed the Income-tax Officer to determine if depreciation allowed under the Industrial Tax Rules related to income-tax or super-tax laws. The Court noted that the validity of paragraph 2 had been established by a Supreme Court decision and should apply where relevant. The Court clarified that the Tribunal did not contest the provision's applicability but rather focused on the determination of whether the Industrial Tax Rules aligned with income-tax laws. The Court concluded that paragraph 2 is a valid law, applicable if the Income-tax Officer confirms that the Industrial Tax Rules are related to income-tax or super-tax laws. In conclusion, the Court upheld the Tribunal's decisions on both issues, affirming the interpretation of "depreciation actually allowed" and the potential applicability of paragraph 2 of the Taxation Laws (Part B States) (Removal of Difficulties) Order, 1950, subject to the Income-tax Officer's determination.
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