Delegated rule cannot nullify statutory depreciation allowance by prescribing nil rate for assets held briefly.

Depreciation under section 10(2)(vi) was treated as a statutory allowance for computing true business profits by recognising wear and tear of assets. The rule-making power under section 59 could not be used to nullify that allowance by prescribing a nil depreciation rate for buildings, machinery, plant or furniture held for 30 days or less. To that extent, the rule conflicted with the parent provision and was invalid. Depreciation for the relevant one-month period was therefore allowable to the assessee.

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Issues: Whether the rule prescribing nil depreciation for buildings, machinery, plant or furniture held for 30 days or less was within the rule-making power under the Act and whether the assessee was entitled to depreciation on the assets used during the relevant month.

Analysis: Depreciation under section 10(2)(vi) is an allowance directed to the computation of true profits and is intended to recognise wear and tear of business assets. The rule-making power under section 59 permits rules only for carrying out the purposes of the Act. A rule that withdraws depreciation altogether by prescribing a nil rate for a class of assets or cases based on the period of holding was held to go beyond that power. To the extent the rule denies any depreciation for assets held for 30 days or less, it conflicts with the statutory allowance under section 10(2)(vi) and cannot prevail. The assessee was therefore entitled to depreciation for the one-month period.

Conclusion: The nil-depreciation part of rule 8(2) was held to be invalid to the extent of the conflict, and the depreciation claim was allowed in favour of the assessee.

Ratio Decidendi: A delegated rule cannot nullify a statutory depreciation allowance by prescribing a nil rate in a manner inconsistent with the parent provision's mandate to allow depreciation for business assets.

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