Sabyasachi Mukharji, J. - (1.) In this judgment, we propose to deal with these two references, because these relate to a common question relating to the same assessee for different assessment years. We shall, however, have to refer to a slight difference in the findings of the AAC in respect of one year, viz., the order passed by the AAC in Income-tax Reference No. 670A of 1972, which would be relevant and to which we shall refer at the relevant time.
(2.) The assessee is a non-resident shipping company registered in Sweden. So far as the first reference in concerned, the assessment year under consideration is 1963-64, the corresponding accounting year being the year ending December 31, 1962. The ITO had not allowed depreciation on the two ships, viz., Bali and Mindore, which were acquired in the year 1941 on the ground that these two ships were acquired more than twenty years ago. The ITO computed the total income at Rs. 1,63,572. It will be relevant for the present purpose to refer to certain portions of the order of the ITO. Dealing with the depreciation on these two vessels, the ITO observed, inter alia, as follows : "Deduct : Depreciation on vessels for reasons discussed in the assessment order for 1962-63, depreciation is not allowable on two vessels, viz., Bali & Mindore, which were acquired in 1941 and have, therefore, completed twenty years in the assessment year 1961-62. Depreciation is allowed as under : JUDGEMENT_148_ITR127_1981Html1.htm With the other items, we are not concerned.
(3.) There was an appeal before the AAC. Before the AAC, it was contended on behalf of the assessee that these two ships were purchased in 1941 and normally the depreciation should have been up to and including assessment year 1961-62 only, since the claim could be made only for 20 years. However, it was stated that during the war years, these two ships did not touch any Indian port between April, 1940, and December, 1945. Hence, it was urged that the depreciation on these ships should be allowed up to and including the assessment year 1966-67. On this question for the preceding year, the AAC noted that the contention of the assessee had been accepted. Therefore, he held that depreciation on the two ships in question was to be allowed for the year tinder appeal. The AAC, however, directed that the assessee should produce before the ITO evidence to show that no depreciation had been claimed or allowed during the war years on these two ships. He disposed of the contention before him in the manner indicated before.;