1979 (12) TMI 85

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....at Rs.38,097. In doing so, the ITO deducted the initial depreciation allowed under s. 32(1)(v) for the asst. yr. 1974-75 in taking the value of the assets on which the deductions were to be computed. Secondly, he deducted the borrowed capital out of the balance to arrive at the amount of capital employed. Thirdly, he set off the unabsorbed depreciation and development rebate brought forward from the earlier years against the total income with the result that, according to him, the deduction claimed could not be given in this year but had to be carried forward. On appeal, AAC confirmed the computation made by the ITO and the carry forward of the deducted. 3. In the further appeal before us, it was contended on behalf of the assessee that ....

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....f some income remains after setting off carried forward development rebate and depreciation. In reply, it was pointed out on behalf of the assessee that the arguments with reference to s. 32(1)(v) had not been appreciated by the Madras High Court in the case of Lucas T.V. Ltd. 4. On careful consideration of the rival submissions, we are of the opinion that the assessee is entitled to recomputation of the deduction allowable under s. 80-J of the Act. On the first point relating to the deduction of initial depreciation, the decision of the Madras High Court in the case of Lucas TVS. Ltd., is directly in its favour. That case has also rejected the arguments of the Department that the provisions of s. 32(1)(v) were confined to that section a....