1970 (11) TMI 36

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....d the following two questions of law under section 66(2) of the Indian Income-tax Act, 1922 : "1. Whether, on the facts and in the circumstances of the case, it was necessary that the factory should have been used by the assessee during the previous year for the surplus of Rs. 10,16,443 being assessed under section 10(2)(vii) ? 2. If the answer to question No. 1 is in the affirmative, whethe....

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....wn value. A This excess was assessed by the Income-tax Officer under section 10(2)(vii), second proviso, of the Act, as profit. In arriving at the written down value of the assets sold, the depreciation for the previous year was not taken into account, as such depreciation had not been allowed in respect of that year, the reason being that the factory had not worked during that year. The assessee ....

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....ing the previous year no business had been carried on in this factory and the working season had not commenced when the factory was sold. It also held that depreciation is normally allowed in the case of seasonal factories for the whole year. The contention of the departmental representative that the factory should be deemed to have carried on business, being a seasonal factory, was rejected. Acco....

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....ed in favour of the assessee in view of the Supreme Court decision in Commissioner of Income-tax v. Moon Mills Ltd. In fact, this is the consistent view that the Supreme Court has taken right from Liquidators of Pursa Ltd. v. Commissioner of Income-tax, and we see no reason to take a different view of the matter. In our opinion, the first question stands completely concluded by the aforesaid decis....