KALOORAM GOVINDRAM vs COMMISSIONER OF INCOMETAX, MADHYA PRADESH

The Supreme Court held that for the purpose of depreciation under Section 10(2)(vi) of the Indian Income-tax Act, 1922, the cost of property acquired by a member of a Hindu joint family at partition is determined by the auction price rather than the original cost to the larger family. The Court emphasized that the substance of the transaction is that a member acquires an absolute title to specific property, and the actual cost at the time of acquisition is relevant. The High Court's ruling that both branches' shares should be valued based on the original cost was overturned, affirming the auction price as the basis for depreciation claims.