COMMISSIONER OF INCOME TAX Vs. BUCKINGHAM AND CARNATIC COMPANY LIMITED
HIGH COURT OF BOMBAY
COMMISSIONER OF INCOME TAX
BUCKINGHAM AND CARNATIC COMPANY LIMITED
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Lancelot Sanderson, J. -
(1.) THIS is an appeal by the Commissioner of Income-Tax from a judgment and order of the High Court of Judicature at Madras dated May 2, 1934, whereby the High Court, upon the hearing of a case referred to it by the appellant under the provisions of the Indian Income-tax Act, 1922 (XI of 1922), answered certain questions of law raised thereby adversely to the contentions of the appellant.
(2.) THE questions of law referred to the High Court arose in the course of the assessment of the profits and gains of the business of the respondent company for the tax year beginning on April 1, 1931.
The main question arising for determination in this appeal is whether the allowance to be made to the respondent company in respect of depreciation of buildings and machinery used by them for the purposes of their business should be calculated by reference to the cost thereof to the respondent company or by reference to the original cost thereof to certain companies from which such buildings and machinery were acquired by the respondent company.
The material facts, as stated in the case which the Commissioner of Income-tax referred for the opinion of the High Court under Section 66 (l) of the said Act, are as follows:
(3.) THE Buckingham and Carnatic Company, Limited, (hereinafter referred to as " the company ") is a public limited company which was incorporated on November 29, 1920, under the Indian Companies Act, 1913.
The objects of the company were to acquire, take over, amalgamate with, work and carry on the businesses hitherto carried on in Madras and elsewhere by five limited companies which were registered under the Indian Companies Act and the goodwill of the said businesses, to enter into and carry into effect an agreement which had bean prepared and was expressed to be made between the said five companies, their liquidators and the company, to carry on the business so to be acquired, and generally to carry on the business of cotton spinners.;
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