Judgment

SIKRI, J.: This is an appeal by special leave against the judgment of the Madras High Court in a case referred to it under the Indian Income-tax Act, 1922, hereinafter referred to as the Act, answering the question of law against the assessee. The question referred is:

"Whether four-fifth of the sum of Rs. 1,21,245 written off in the books of the assesse as depreciation for the calendar year 1953 is allowable as a deduction in the assessment completed under Section 10 (7) and the rules contained in the schedule of the Income-tax Act."

2. The facts relevant for answering the question are as follows. The assessee is a public limited company carrying on the business of general insurance. It erected a modern substantial building with lifts and air-conditioning at a cost of Rs. 12,08,252/- and got it ready for occupation from December 1, 1952. In its books for the calendar year 1953, the previous year for assessment year 1954-55, it wrote off Rupees 1,21,245/- as depreciation as follows:

Rate Amount

Buildings 10% 1,06,940

Air-conditioning Plant 15% 2,973

Lifts 15% 6,214

Transformers 15% 1,442

Internal Telephone 15% 3,676

Total 1,21,245

3. It was common ground before the Income-tax