1987 (11) TMI 62

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.... ID of the Wealth-tax Rules, 1957, for the assessment years 1967-68 to 1974-75 ? (2) Whether the Tribunal was justified, for the assessment years 1967-68 to 1974-75, in holding that in applying rule 1D of the Wealth-tax Rules, 1957, it is only the value of the ships that appear in the balancesheet of the company that should be taken into account and not the written down value of these ships adopted for the purpose of income-tax assessment of Collis Line P. Ltd. ?" Question No. (1) has to be, in the light of the decision of this court in CWT v. Mamman Varghese [1983] 139 ITR 351 (Ker), answered in the affirmative, that is, in favour of the Revenue and against the assessee. We do so. As regards question No. (2), certain facts must be....

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.... the full value, as shown in the balance-sheet, and reduce therefrom only the depreciation shown in the balance-sheet and not the depreciation allowable in law. Counsel for the assessees submits that the rate of depreciation shown in the balance-sheet is lower than the relevant rate recognised under the Income-tax Act and the Rules. Counsel for the Revenue, on the other hand, submits that the orders of the Wealth-tax Officer as well as the orders of the Tribunal show that what was deducted from the full value of the assets shown in the balance-sheet was the depreciation which is deductible under the Income-tax Act and the Rules. In short, the dispute is not about any principle of law or accountancy, but only about the arithmetic adopted by ....

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....essee has, for whatever reason, shown in the balance-sheet depreciation which is not correctly computed in accordance with the statute. It is the statutory rate which must be applied for computation of the depreciation and deduction of the same from the value of the assets shown in the balance-sheet. The value of the assets is what is stated in the balance-sheet, and not any other value, and it is from that value that deduction is made at the statutorily prescribed rate of depreciation. What exactly are the correct rates of depreciation applicable for the assets in question for the relevant period must necessarily be computed by the concerned officer. We have no doubt that the assessees' grievance regarding the error, if any, will be con....