HUKUMCHAND MILLS LTD. versus COMMISSIONER OF INCOME-TAX, CENTRAL BOMBAY & ORS.

Citation: [1967] 1 S.C.R. 463 · Decided: 22-09-1966 · Supreme Court of India · Bench: J.C. SHAH · Disposal: Dismissed

Judgment (excerpt)

A 
B 
c 
D 
E 
F 
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HUKUMCHAND MILLS LTD. · 
v. 
COMMISSIONER OF INCOME-TAX, CENTRAL BOMBAY 
& ORS. 
September 22, 1966 
(J, C. SHAH, V. RAMASWAMI AND V. BHARGAVA, JJ.] 
Income-tax Act (11 of 1922), s. 33(4)-Appel/ate Tribunal-Juris· 
diction .to entertain new points in appeal and order remand. 
The subject-matter of the assessee's appeal before the Income-tax 
Appellate Tribunal was the question as to what 
should be the proper 
written down value of its buildings, machinery etc., for calculating the 
depreciation allowance unMr s. 10(2) (vi) of the Income-tax Act, 1922. 
The Department sought to support the orders of the Income-tax Officer 
and the Appellate Assistant Commissioner on the new ground that para· 
graph 2 of the Taxation Laws (Part B States) (Removal of Difficulties) 
Order, 1950, was applicable, and that certain 
amounts of depreciation 
which were allowed under the Industrial Tax Rules had to be deducted 
in arriving at the written down value. The Tribunal permitted the con· 
tention to be raised and remanded the matter to the Income-tax Offic~r 
for considering the question whether the Industrial Tax Rule.s related to 
income-tax or super-tax or any law relating to tax on profits of business, 
for ascertaining whether any depreciation was allowed under those Rules, 
and whether such depreciation should be taken into account for the pur-
pose of computing the written down value. 
In this Court, the jurisdic-
tion of the Tribunal-to entertain and go into the question raised by the 
Department for the first time before it, and to remand the case in 
tho 
manner· it has done-was questioned. 
HELD : Under s. 33 ( 4) of the Act the Tribunal has got power to 
entertain the argument of the Department,. to remand, and to give the 
directions to the Income-tax Officer. The 
Appellate. 
Tribunal Rules, 
1946, made under s. 5A(8) of the Act, are merely procedural in charac-
ter and do not, in any way, circumscribe or control the powet of the 
Tribunal under s. 33(4). [468 B-C] 
CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 411 to 
415 of 1965. 
Appeals from the judgment and order dated June 22, 1962, of 
the Bombay High Comt in I. T. R. N. 34of1960. 
A. S. Bobde, and 0. C. Mathur, for the appellant (In C. As. 
Nos. 411-413 of 1965) and the respondent (In C. As. Nos. 414 and 
415 of 1965). 
B. Sen, Gopal Singh and R .. N. Saclzthey, for the respondent 
(in C. As. Nos. 411-413 of 1965) and the Appellant (in C. As. 
Nos. 414 and 415 of 1965). 
H 
The Judgment of the Court was delivered by 
Ramaswami, J, These five appeals consolidated by an order 
of the Born bay High Court arise out of a Reference made by the 
464 
SUPREME COURT REPORTS 
[1967] l S.C.R. 
Income-tax Appellate Tribunal, Bombay Bench •A' on January 2, 
1959 and decided by the Bombay High Court on September 22, 1962. 
The High Court granted certificates to appeal against its judgment 
under s. 66-A of the Income Tax Act, 1922 to both the Commissioner 
of Income-Tax, (Central) Bombay and the assessee. 
Civil Appeals 
Nos. 411 to 413 of 1965 arc·brought on behalf of the asscsscc and 
Civil Appeals Nos. 414 and 415 of 1965 arc brought on behalf of the 
Commissioner of Income-Tax, (Central) Bombay. 
Hukumchand Mills Ltd. (hereinafter referred to as the 'assessce') 
is a public company incorporated in the previous Indore State. 
The assessee owns a textile mill there. 
Up to the assessment year 
1949-50 it was being assessed in British India as a non-resident (except 
in 1948-49 when it was assessed as a resident), on such income as 
fell withins. 4 (!)(a) or 4(1)(c) read withs. 42 of the Income Tax 
Act, 1922 (hereinafter referred to as the 'Act'). After the Consti-
tution came into force, Indore became a Part B State and the Act 
was brought into force in such States with effect from April 1, 
1950. The asscssec therefore became liable to be assessed as a 
resident from the assessment year 1950-51. 
The assesscc was accordingly assessed as a resident in the years 
1950-51, 1951-52 and 1952-53. One of the questions which arose 
for deterrr.ination in the assessments for these years was the proper 
written down value of the buildings, machinery etc. of the asscssce 
for calculating the depreciation allowance under s. 10(2)(vi) of the 
Act. The assessee relied upon s. 10(5)(b) and contended that the origi-
nal cost of the machinery, buildings etc. should be taken for this 
purpose. That sub-clause provided that in the case of assets 
acquired before t

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