COMMISSIONER OF INCOME-TAX, BOMBAY vs DHARAMPUR LEATHER CLOTH CO. LTD., BOMBAY

The Supreme Court held that the term 'actually allowed' in Section 10(5)(b) of the Indian Income-tax Act, 1922 does not encompass notional allowances, affirming that the original cost of machinery should be treated as the written down value for depreciation purposes. The Court ruled that the exemption granted under the Merged States (Taxation Concession) Order, 1949 was based on Section 60A of the Income-tax Act, and not on any prior agreement with the Ruler, thus the 1962 amendment did not affect the case. The High Court's decision in favor of the company was upheld, allowing the claim for depreciation.