Judgment

RANGANATHAN

( 1 ) THE appellants are all electric supply undertakings situated in various parts of the country. All the appeals relate to the assessment year 1962-63 or later. They raise a common question regarding the computation of depreciation on service lines installed by the assessees, a part of the expenditure incurred in connection with the installation of which is recovered by the assessees from consumers of electricity.

( 2 ) DEPRECIATION, under the Income Tax Act, is computed as a percentage of the "written down value" of the asset in question. The Income Tax Act, 1961 came into force on 1/04/1962. S. 43 (6 of the Act defines "written down value" thus :

"43. (6 written down value means (a) in the case of assets acquired in the previous year, the actual cost to the assessee; (b) in the case of assets acquired before the previous year, the actual cost to the assessee less all depreciation actually allowed to. him under this Act, or under the Indian Income Tax Act, 1922 (11 of 1922, or any Act repealed by that Act, or under any executive orders issued when the Indian Income Tax Act, 1886 (2 of 1886, was in force. "the Act also defines the expression actual cost in S. 4