M/S. DYNAMIC ORTHOPEDICS PVT. LTD. vs COMMISSIONER OF INCOME TAX, COCHIN

The Supreme Court ruled that for the purpose of computing book profit under Section 115J of the Income Tax Act, 1961, the depreciation should be allowed as per the Income Tax Rules, 1962, rather than the rates specified in Schedule XIV of the Companies Act, 1956. The Court held that since the assessee was a private limited company, the provisions of Section 350 of the Companies Act were not applicable, and thus the Income Tax Officer erred in directing the use of Schedule XIV rates. The appeal by the assessee was allowed, overturning the High Court's decision.