THE COMMISSIONER OF INCOME-TAX,HYDERABAD vs DEWAN BAHADUR RAMGOPAL MILLS LTD.

The Supreme Court addressed the validity of the Taxation Laws (Part B States) (Removal of Difficulties) Order, 1950, particularly Paragraph 2, in relation to the assessment of depreciation allowances under the Indian Income-tax Act, 1922. The Court held that the Central Government's notification, which clarified the interpretation of depreciation allowances, was valid and had retrospective effect, thereby allowing the respondent to claim depreciation based on the written down value of assets as per the Hyderabad Income-tax Act. The Court emphasized that the principle of depreciation must reflect a decrease in value over time, affirming the assessment made under the Indian Income-tax Act for the year 1951-52.