Written down value computation includes notional and actually availed depreciation under earlier tax laws and removal orders.

Depreciation for computing written down value was treated as a statutory notional allowance where the relevant provision referred to depreciation that "would have been allowed" under an earlier income-tax law, so the absence of an actual claim did not prevent reduction of written down value. The same computation principle was applied where depreciation had already been availed of under the Bhavnagar War Profits Act: paragraph 2 of the Removal of Difficulties Order was read as operating according to its terms, and that enactment fell within the expression covering laws relating to tax on business profits. In both settings, the Revenue's method of computation was upheld.

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Issues: (i) Whether, for the assessment year 1949-50 under section 13(5)(b) of the Saurashtra Income-tax Ordinance, 1949, the written down value had to be reduced by depreciation that would have been allowable under the Indian Income-tax Act, 1922, even though no claim was actually made; (ii) Whether, for the assessment year 1951-52, depreciation availed of under the Bhavnagar War Profits Act was deductible in computing written down value under section 10(5)(b) of the Indian Income-tax Act, 1922, read with paragraph 2 of the Taxation Laws (Part B States) (Removal of Difficulties) Order, 1950.

Issue (i): Whether, for the assessment year 1949-50 under section 13(5)(b) of the Saurashtra Income-tax Ordinance, 1949, the written down value had to be reduced by depreciation that would have been allowable under the Indian Income-tax Act, 1922, even though no claim was actually made.

Analysis: The expression referring to depreciation that "would have been allowed" was construed as incorporating the consequence that depreciation under the earlier Indian Income-tax Act would be taken into account as if a proper claim had been made. The provision was read as a fiction directed to the ascertainment of written down value, and the absence of an actual claim did not prevent the notional allowance from being deducted.

Conclusion: The question was answered in the affirmative, against the assessee and in favour of the Revenue.

Issue (ii): Whether, for the assessment year 1951-52, depreciation availed of under the Bhavnagar War Profits Act was deductible in computing written down value under section 10(5)(b) of the Indian Income-tax Act, 1922, read with paragraph 2 of the Taxation Laws (Part B States) (Removal of Difficulties) Order, 1950.

Analysis: Paragraph 2 of the Removal of Difficulties Order was held to operate according to its terms once validly made, without requiring a fresh showing of difficulty in each individual case. The words "any law relating to tax on profits of business" were construed to include the Bhavnagar War Profits Act, so depreciation already availed of under that enactment had to be brought into the computation of written down value.

Conclusion: The question was answered in the affirmative, against the assessee and in favour of the Revenue.

Final Conclusion: The assessee's claims failed on both sets of appeals, and the Revenue's computation of written down value was upheld throughout.

Ratio Decidendi: Where a taxing provision or removal-of-difficulties order expressly requires depreciation that "would have been allowed" or "actually allowed" under earlier or related laws to be taken into account, the computation must be made on that statutory footing even if no claim was in fact made, and a validly issued order under the enabling power operates according to its terms across all covered cases.

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