TMI Blog1969 (1) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... on the facts and in the circumstances of the case, the profits under section 10(2)(vii), second proviso, should be computed by deducting depreciation actually allowed under section 10(2)(vi) read with section 10(3) and not any notional depreciation allowable under section 10(2)(vi) from the written down value of the car within the meaning of section 10(5)(b)? " The assessee is an individual and the controversy relates to the assessment year 1960-61 (previous year ending March 31, 1960). The assessee purchased a motor-car for Rs. 14,500 on March 7, 1951. The Income-tax Officer held that the car was not wholly used for the purposes of the assessee's business. He, therefore, restricted the depreciation allowance admissible under section 10( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale price and the correct written down value. The revenue appealed to the Income-tax Appellate Tribunal. The contention of the revenue before the Tribunal and its findings may best be put in the words of the Tribunal : " The departmental representatives has not disputed the propositions that the written down value means the ' actual cost ' less depreciation actual allowed to the asssess namely, 50% of the total depreciation admissible as liad down in section 10(5)(b) of the Act. He has however contented that in the view of section 10(3) of the Act, 50% of the original cost should be taken as the cost of the motor-car to the assessee and the department actually allowed to the asssessee in all these years should be deducted from written do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the asset, only haii its price, should be taken into account. We find it difficult to share this view as thereis no basis for such division or the splitting up of the asset into two. On the other hand, the language of section 10(3) makes it plain that such a theory cannot be, sustained. It is not the division of the asset as being used for business and non-business purposes that is contemplated by the section but only apportionment of the depreciation allowance as between the use of it for business purposes and its use for non-business purposes. However, that need not detain us any longer as we are not convinced that such a proposition can be sustained either on the language of any section or on authority." The argument of the revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onal depreciation allowable. In Vankadam Lakshminaryana's case also the Andhra Pradesh High Court held that in computing the written down value the depreciation actually granted to the assessee had to be taken into consideration and not the depreciation notionally allowable. Mr. Kirpal, the learned counsel for the revenue, relied on section 10(3) which provides that where any plant or machinery is not wholly used for the purpose of the business, the allowance shall be restricted to the fair proportional part which would be allowable if such machinery, plant, etc., was wholly so used, That provision appears to be directed towards the calculation of depreciation that can be allowed in case of machinery or plant not wholly used for the purpo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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