MAHARANA MILLS PVT. LTD. vs INCOME TAX TRIBUNAL, AHMEDABAD & ORS.

The Supreme Court addressed the validity of the Explanation added to Clause (2) of the Taxation Laws (Part B States) Removal of Difficulties Order, 1950, under Section 60A of the Income Tax Act, 1922. The Court upheld the validity of the Explanation, reversing the Andhra Pradesh High Court's decision that deemed it ultra vires. The ruling clarified the computation of depreciation allowance and written down value for companies operating in erstwhile princely states, affirming the applicability of the Income Tax Act, 1922 post-integration of Saurashtra into India.