Judgment

SHAH, J.: M/s. Modi Spinning & Weaving Mills Co. Ltd., hereinafter called the Company - was incorporated in 1946. From time to time the Company purchased and installed machinery of the value of Rs. 75 lakhs for its factory. In proceedings for assessment of income-tax, the company was allowed in computing its income from business for the assessment years 1950-51, 1951-52 & 1952-53 "initial depreciation" aggregating to Rs.15,91,511/- in respect of new machinery installed in the relevant previous years. The Company was also allowed "normal depreciation" at the appropriate rates. In assessment year 1956-57 the aggregate of all depreciation allowances including "initial depreciation" exceeded the original cost of the machinery, but the Income-tax Officer on the written down value of the machinery computed at Rs. 16,48,053/- allowed Rs. 2,59,236/as normal depreciation. In so computing the normal depreciation the Income-tax Officer apparently lost sight of clause (c) of the proviso to Section 10 (2) (vi) of the Income-tax Act, 1922. Depreciation allowance was also allowed in e assessment years 1957-58 and 1958-59 as a percentage on the appropriate written down value in those year