Wear and tear allowance: "actual cost to the person" is measured by expenditure incurred, not later grants or reimbursements.

For wear and tear allowance under Rule 6 of the Rules of Cases I and II of the Income Tax Act, 1918, "actual cost to the person" meant the expenditure actually incurred by the taxpayer on constructing or acquiring the plant or tramway track. Grants, reimbursements, or later recoupment from another source did not reduce that cost, because the phrase was concerned with the real cost to the trade owner rather than the ultimate source of funding. The allowance was therefore computed on the full expenditure incurred without deduction for subsequent contributions or grants.

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Issues: Whether, for the purpose of wear and tear allowance under Rule 6 of the Rules of Cases I and II of the Income Tax Act, 1918, grants or reimbursements received by the assessee reduce the 'actual cost to the person' of the plant or tramway track.

Analysis: The allowance was computed on the basis of the expenditure actually incurred on the tramway tracks. The phrase 'actual cost to the person' was construed as referring to the real cost of the asset to the person carrying on the trade, namely the amount expended by that person on the construction or acquisition of the plant. The source from which the money was obtained, or whether part of the expenditure was later recouped by a third party or by a public grant, did not alter the actual cost. The expression was read as excluding any deduction merely because the assessee had received money from another source to meet or reimburse the expenditure.

Conclusion: Grants and reimbursements did not reduce the 'actual cost to the person' for wear and tear allowance, and the appeal succeeded.

Final Conclusion: The assessee was entitled to compute the allowance on the full expenditure incurred on the tramway tracks without deducting the amounts later received by way of contribution or grant.

Ratio Decidendi: For wear and tear allowance, 'actual cost to the person' means the expenditure actually incurred by the taxpayer on the asset, unaffected by subsequent recoupment or the source of funds.

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