COMMISSIONER OF INCOME TAX Vs. EVERETT ORIENT LINE CORPORATION

JUDGEMENT

(1.) These three appeals are by way of Special Leave arise out oi judgment of the High Court of East Pakistan in three Reference cases under section 66(2) of the Income-tax Act. As a common question of law is involved, they are heard analogously and disposed of by one judgment. The question is whether under the provisions of section 10(2} (vi) of the Income Tax Act read with rule 9 of the Income Tax Rules the initial depreciation is allowable to vessels belong to non-resident companies which did not ply in Pakistan waters and which had not been installed in Pakistan.

(2.) The respondent-assessees are non-resident shipping companies. Their registrations are in the United States of America. The Companies received some of their incomes in the then Pakistan by their ships touching Pakistan ports for loading and unloading cargoes.

(3.) The respondents were assessed to income tax by the Income Tax Officer, Companies Circle 1, Chittagong for the assessment year 1966-67, 1962-63 and 1963-64 and in so doing he disallowed the claim for initial depreciation of their new ships used by them in respective years of assessment.