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PETITIONER: THE MAHALAXMI MILLS LTD.

       Vs.

RESPONDENT: THE COMMISSIONER OF INCOME-TAX,BOMBAY(And connected appeals)

DATE OF JUDGMENT: 08/04/1960

BENCH:

ACT: Income  Tax-Depreciation-Computation of written down  value- Deduction of depreciation in earlier  years-Scope-Saurashtra Income Tax Ordinance, 1949, s. 13(5) (b)-Taxation Laws (Part B  States)  (Removal of Difficulties) Order, 1950,  para  2- Indian Income Tax Act, 1922 (11 of 1922), s. 10(5) (b).

HEADNOTE: The  assessees were carrying on business in Bhavnagar  which was formerly an Indian State.  In 1948 Bhavnagar became part of the United State of Saurashtra and on March 16, 1949  the Saurashtra  Income-tax Ordinance was promulgated.   For  the purpose  of calculating the depreciation allowance to  which the  assessees  were entitled in computing  the  profits  or gains  of  the  business,  the written  down  value  of  the building,   machinery  etc.,  had  to  be   ascertained   in accordance  with the provisions of the  Ordinance.   Section 13(5)  (b) of the Ordinance provided that "the written  down value  meant,  in  the case of assets  acquired  before  the previous  year,  the actual cost to the  assessee  less  all depreciation  actually allowed to him under  this  Ordinance or.........  which  would have been allowed to  him  if  the Indian Income-tax (1) A.I.R 217 Act,  1922, was in force in the past".  For  the  assessment year  1949-50,  as  the assets of  the  assessees  had  been acquired  before the previous year, the Income-tax  Officer, in  ascertaining  the  written  down  value,  deducted   the depreciation  which  would  have been  allowable  under  the Indian  Income-tax Act, 1922, if it had been in force and  a claim had been made supported by the prescribed particulars. The assessees claimed that on the wording of it s. 13(5) (b) of  the Ordinance did not enable the Income-tax  Officer  to make the deduction, as, in fact, no claim was made or  could be made for such allowance. For the assessment year 1951-52, as by that time  Saurashtra had  become  a Part B State of the Union of  India  and  the Indian  Income-tax  Act, 1922 had been extended to  it,  the Income-tax  Officer, applied the provisions of s. 10(5)  (b) of  the  Indian  Income-tax  Act read with  para  2  of  the Taxation  Laws  (Part B States)  (Removal  of  Difficulties) Order,  1950,  while computing the written  down  value  and deducted not only the depreciation allowed in the assessment year  1950-51  under  the  Indian  Income-tax  Act  and  the depreciation  allowed in the assessment year  1949-50  under the  Saurashtra Income-tax Ordinance but also the  deprecia- tion availed of in the previous years by the assessees under the  Bhavnagar War Profits Act.  Paragraph 2 of the  Removal

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of  Difficulties  Order  of 1950 provided:  "In  making  any assessment  under  the  Indian  Income-tax  Act,  1922,  all depreciation  actually allowed under any laws or rules of  a Part B State relating to income-tax and super-tax or any law relating  to tax on profits of business shall be taken  into account  in computing the written down value under s.  10(5) (b)  of the Act".  The assessees contended that it was  only when a difficulty was actually experienced in giving  effect to  the Act that the provision of the Order could come  into operation in a particular case and as no such difficulty was actually experienced the said provision had no  application, and that, in any case, as the Bhavnagar War Profits Act  was not  a law of the Part B State, para 2 of the Order was  not applicable. Held:(i) On the true construction of s. 13(5)(b) of the Saurashtra Income-tax Ordinance, the words "which would have been allowed to him" in that sub-section meant "which should have  been allowed if proper claim had been made", and  that in ascertaining the written down value the depreciation that would have been allowed if proper claim had been made if the Indian  Income-tax Act, 1922, which was not in force in  the State before, had been in force, should be deducted. Commissioner  of Income-tax v. Kamala Mills Ltd., [1949]  17 I.T.R.   130   and  Rajaratna  Naranbhai   Mills   Ltd.   v. Commissioner   of   Income-tax   [1950]   18   I.T.R.   122, distinguished. (ii)It  was for the Central Government to determine if  any difficulty had arisen in giving effect to the provisions  of the Indian 218 income-tax  Act,  1922,  and  then to  make  such  order  as appeared to it necessary to remove the difficulty, that once the order was made it operated under its own terms, and that in  giving effect to the order it was not necessary for  the Income-tax  Officer to examine first in any particular  case whether  any difficulty had arisen.  Accordingly, para 2  of that Taxation Laws (Part B States) (Removal of  Difficulties Order, 1950, was applicable. Commissioner of Income-tax v. Dewan Bahadur Ram Gopal  Mills Ltd., [19611 2 S.C.R. 318, followed. (iii)The Bhavnagar War Profits Act was a law within the words  " any law relating to tax on profits of business"  in para 2 of the Removal of Difficulties Order of 1950.

JUDGMENT: CIVIL  APPELLATE JURISDICTION:   Civil Appeals Nos.  599-602 of 1962. Appeals  from the judgment and order dated April 7, 8,  1960 of the Bombay High Court in Income-Tax Reference Nos. 70 and 71 of 1956. R.J.  Kolah, Ravinder Narain, J. B. Dadachanji and O.  C. Mathur for the appellants (In all the Appeals). N.D. Karkhanis and R. N. Sachthey, for the respondent (In all the Appeals). The Judgment of the Court was delivered by DAS GUPTA J.-The assessee is the appellant in each of  these four  appeals arising out of four references under s.  66(1) of  the Indian Income-tax Act to the High Court  of  Bombay. In  two of these appeals (C.A. Nos. 599 & 600 of  1962)  the assessee  who has filed the appeals is the  Mahalaxmi  Mills Ltd.,  in the other two (C.A. Nos. 601 and 602 of 1962)  the Master Silk Mills Ltd., is the appellant-assessee.   Appeals Nos. 599 and 601 are in respect of the assessment year 1949-

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50; the other two are in respect of assessment year 1951-52. The  controversy  in  all  these cases  is  as  regards  the computation   of   written   down   value   in   calculating depreciation allowance. Both the assessees bad from before 1949-50 been carrying  on business  in Bhavnagar which was formerly an  Indian  State. In 1948 Bhavnagar along   with  other  Indian  States  of   Kathiawar   formed themselves into a union by the name of United States 219 of  Kathiawar.   Later  the name Kathiawar  was  changed  to Saurashtra.   On  March 16, 1949, the Raj  Pramukh  of  this newly-formed  State  instituted  the  Saurashtra  Income-tax Ordinance,  1949.  This Ordinance was in force for one  year only  the assessment year 1949-50. In assessing the  profits of  business  by the two appellant-companies  for  the  year 1949-50  the Income-tax Officer had therefore to proceed  in accordance with  the provisions of this Ordinance.  For the purpose  of calculating the depreciation allowance to which the assessee was  entitled  in  computing the profits  or  gains  of  the business  the written down value of the building,  machinery and  plants  or  furniture had first to  be  ascertained  in accordance with S.   13(5) of the Ordinance which ran thus:- "Written down value" means:- (a)in  the case of assets acquired in the  previous  year, the actual cost to the assessees; (b)in the case of assets acquired before the previous year the  actual  cost  to the  assessee  less  all  depreciation actually  allowed  to him under’ this Ordinance  or  allowed under any Act repealed hereby or which would have been allo- wed to him if the Indian Income-tax Act, 1922, was in  force in the past." As the assets-of both the assessees had been acquired before the previous year s. 13(5) (b)applied. Reading the words  in the last part of s. 13(5) (b) as equivalentto which  would have been allowable to him if theIndian  Income-tax   Act, 1922, was in force" the income-tax Officer, in  ascertaining the  written down value, deducted depreciation  which  would have  been allowable under the Indian Income-tax Act,  1922, if it had been in force and a claim had been made  supported by  prescribed particulars.  This amount in the case of  the Mahalaxmi Mills Ltd., the appellant in C.A. No. 599/62,  was computed as Rs. 17,21,041 and in the case of the Master Silk Mills Ltd., the appellant in C.A. No. 601/62, was calculated as Rs. 2,02,500.  The obvious result of deducting 220 this   amount  was  that  the  written  down  value   became considerably  lower than what it would have  been  otherwise and   so  the  depreciation  allowance  became  less.    The assessee’s  contention  that no deduction should  have  been made  on  the strength of the words which  would  have  been allowed  to him if the Indian Income-tax Act, 1922,  was  in fact  in force in the past" as in fact no claim was made  or could  be  made  for such allowance,  was  rejected  by  the Income-tax Officer.  The Appellate Assistant Commissioner as also the Income-tax Tribunal, however, took a different view and  held  that this expression "or which  would  have  been allowed  to him if the Indian Income-tax Act, 1922,  was  in force in the past" did not permit the Income-tax Officer  to make  any  deduction under this bead.  The question  of  law which  was referred to the High Court under s. 66(1) of  the Indian Income-tax Act on the application of the Commissioner of Income-tax has therefore been framed thus:-

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"Whether  on the above facts and circumstances of  the  case and  upon a proper construction of the expression "or  which would have been allowed to him if the Indian Income-tax Act, 1922,  was in force in the past" in Section 13(5)(b) of  the Saurashtra Income-tax Ordinance, 1949 the written down value has  to  be computed by deduction from the  actual  cost  of depreciation allowance which was allowable under the  Indian Income-tax Act, 1922, even though not claimed?" In each of the case, the High court answered the question in the  affirmative, but gave a certificate that it was  a  fit case for appeal to the Supreme Court under s. 66(A) 2 of the Indian Income-tax Act.  The present appeals have been  filed on the basis of these certificates. On  behalf of the appellants Mr. Kolah has argued  that  the Ordinance has not used. the words "would have been allowable to  him" nor the words" would have been allowed to him if  a claim  supported by prescribed particulars had  been  made", and  there is no justification for reading these words  into the 221 Ordinance.   He  has stressed the fact that  in  many  cases where  the  Indian Income-tax Act is in force  the  assessee might  find it to his interest not to make a claim  for  the depreciation  allowance  and so  no  depreciation  allowance would  then be allowed to him.  He concedes that it  may  be that  the intention of the Rai Pramukh in using these  words in the Ordinance was that the depreciation which could  have been and would have been allowed if a proper claim had  been made and substantiated, assuming the Indian Income-tax  Act, 1922,  was  in  force in the past,  should  be  deducted  in ascertaining  the written down value. file contends  however that  the words actually used are not sufficient to  express and give effect to this intention.  According to him, it was necessary in order to give effect to such an intention  that the  words  "if a. claim had been made supported  by  proper Particulars"  or  at least the words "if a  claim  had  been made"  had  been used in this clause.  In our  opinion,  the words  which according to Mr. Kolah were necessary  to  give effect  to  the  above intention are implicit  in  the  very language  that  has  been used though  they  have  not  been expressly  used.   The authority which  made  the  Ordinance should be credited with having appreciated the position that no  depreciation would have been allowed even if the  Indian Income-tax  Act,  1922,  had  been in  force,  if  no  claim supported  by  proper  particulars  had  been  made.    When therefore  the words "which would have been allowed to  him" were  used  they were used to mean "which should  have  been allowed  if  proper claim had been made.  For, it  would  be meaningless  to  speak  of a  depreciation  allowance  being allowed.  without a claim.  The words used, in our  opinion, are apt and sufficient to express the intention that if  the Income-tax  Act, 1922, which was not in force in  the  State before, had been in force, the depreciation that would  have been  allowed  if  proper  claim had  been  made  should  be deducted in ascertaining the written down value. Mr.  Kolah complains that on this construction the  position of the assessee becomes worse than 222 if  the  Indian Income-tax Act, 1922, had actually  been  in force  in Saurashtra.  If that had. been the case  only  the depreciation  actually  allowed in the earlier  years  would have  been deductible and so, if no claim had been made  and therefore no depreciation had been actually allowed, nothing would ’be deductible under this head.  It does not stand  to reason, argues Mr. Kolah, that the position of the  assessee

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should be made worse by this fiction in s. 13(5) (b) of  the Ordinance  than  it would have been if the Act had  in  fact been in force.  It is not unreasonable to think however that when  making this Ordinance the Raj Pramukh thought that  if the Indian Income-tax Act, 1922, had been in force a  proper claim  would  ordinarily  have been made  and  whatever  was allowable  under  that  law  would  have  been  allowed   as depreciation.   The  words used not only leave no  doubt  as regards  the  intention  of the authority, but  as  we  have already  stated,  are apt and sufficient to give  effect  to that intention. Mr.  Kolah urged that it would cause undue hardship  to  the assessee,  that  without  having  actually  availed  of  any depreciation he would be treated as if he bad done so.   The words used do not however leave any doubt about the  meaning and  whether or not. any hardship has been caused is  beside the point. Neither  of the two cases cited by Mr. Kolah in  support  of his  argument  is  of any assistance.   In  Commissioner  of Income-tax  v. Kamala Mills Ltd.(1)the Calcutta  High  Court decided that the words "actually allowed" in s. 10(5) (b) of the  Indian  Income-tax  Act as amended  by  the  Income-tax (Amendment) Act (XXIII of 1941) are unambiguous and  connote the  idea  that the allowance was in fact given  effect  to. The   Court   rejected  a  contention  of   the   Income-tax authorities  that  the expression "actually  allowed"  means "allowable" under the law in force.  In that case the  Court had not to deal with any expression similar to "depreciation which would have been allowed if the Indian Income-tax  Act, 1922, was in (1)  [1949] 17 I.T.R. 130. 223 force".  In Rajaratna Naranbhai Mills Ltd., v.  Commissioner of  Income-Tax(1) the Bombay High Court had to construe  the words "the amount of depreciation applicable" and held  that as   the   words  were  not   "depreciation   allowed"   but "depreciation  applicable"  it was  immaterial  whether  the assessee  got  any benefit of depreciation in  any  previous year.  Here also, the Court was not called upon to  consider the  effect  of the words under our  present  consideration, viz., the depreciation which would have been allowed if  the Indian  Income-tax  Act,  1922 had  been  in  force.   Thus, neither  of  these  decisions has  any  application  to  the present appeals. For  the  reasons we have already given, we are  of  opinion that  the  High Court was right in  answering  the  question referred in these cases out of which Civil Appeals Nos.  599 and 601 have arisen, in the affirmative. For the assessment years 1951-52 the controversy arises in a different way.  In 1950, Saurashtra became a Part B State of the Union of India; by s. 3 of the Indian Finance Act, 1950, the  Indian Income-tax Act was extended to it.   In  1951-52 therefore  the Indian Income-tax Act, 1922, was in force  in Saurashtra   in  which  Bhavnagar  was  included.   So,   in calculating the written down value of assets acquired before the  previous year the Income-tax Officer had to  apply  the provisions of s. 10(5) (b) of the Indian Income-tax Act, 1922, which runs thus:- "In the case of assets acquired before the previous year the actual  cost to the assessee less all depreciation  actually allowed to him under this Act, or any Act repealed  thereby, or under executive orders issued when the Indian  Income-tax Act, 1886 (11 of 1886) was in force." What  the Income-tax Officer did was to deduct not only  the depreciation  allowed in the assessment year  1950-51  under

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the Indian Income-tax Act but also the depreciation  allowed in the assessment year (1)[1950] 18 I.T.R. 122. 224 1949-50  under the Saurashtra Income-tax Ordinance  and  the depreciation  availed  of  in  the  previous  years  by  the assessee  under the Bhavnagar War Profits Act.  There is  or can  be  no  dispute that the depreciation  allowed  in  the assessment  year 1950-51 was rightly deducted.  There  might have been a dispute ,about the depreciation allowed in 1949- 50 under the Saurashtra Income-tax Ordinance, but, as before the  High Court the assessee conceded that this  amount  was also rightly deducted, and no controversy on this was raised either before the High Court or before us. The only  dispute that  remains is whether the depreciation availed  of  under the  Bhavnagar  War Profits.  Act Rs. 5,93,285 in  C.A.  No. 600/62 by the Mahalaxmi Mills Ltd., and Rs. 1,26,707 in C.A. No. 602/62 by the Master Silk Mills Ltd.--was deductible  in law.   The Appellate Assistant Commissioner agreed with  the Income-tax  Officer that this was allowable.  The  Appellate Tribunal, however, took a different view, but on the  prayer of the Commissioner of Income-tax referred the following two questions  to  the High Court under s. 66(1) of  the  Indian Income-tax Act:- "1. Whether on the above facts and circumstances of the case and  on a correct interpretation of the relevant  provisions of s. 10(5) (b) read with the Taxation Laws (Part B  States) (Removal  of Difficulties) Order, 1950, paragraph 2 and  the Notification  No. 19 (S.R.O.477) dated 9th March 1953  under Section  60A the written down value is to be computed  after deducting  depreciation  allowance  which  could  have  been claimed tinder the Indian Income-tax Act, 1922? 2.   Whether  the Notification No. 19 (S.  R.O.  477)  dated 9th  March 1953 is ultra vires of the powers of the  Central Government?" The  High  Court  has answered the second  question  in  the affirmative  and  the correctness of that is  no  longer  in dispute before us. 225 As  regards  the first question it appears to  us  that  the matter in controversy between the parties which was actually considered  by the High Court is not clearly brought out  by the  question as framed.  Both parties agree that  the  real question on which the High Court’s view was sought and which has  been  actually  considered by the  High  Court  may  be expressed thus:- "Whether  on the above facts and circumstances of  the  case and  on a correct interpretation of the relevant  provisions of  Section  10 (5) (b) of the Indian Income-tax  Act,  1922 read  with  the Taxation Laws (Part B  States)  (Removal  of Difficulties) Order, 1950, paragraph 2 and the  Notification No.  19 (S.R.O.477) dated the 9th March 1953  under  section 60A  the depreciation availed of by the assessees under  the Bhavnagar  War  Profits  Act  was  a  deductible  amount  in computing the written down value of the assets." It  will  be noticed that the validity of  the  Notification referred  to in the question was the subjectmatter  of  the second  question  and the correctness of  the  High  Court’s answer  that it was invalid, was not questioned  before  us. What really remained to be considered by the High Court  was the  effect  of  paragraph 2 of the Taxation  Laws  (Part  B States)  (Removal at’ Difficulties) Order, 1950-to which  we shall  later refer as the "Removal of  Difficulties  Order". The  High Court held that the provisions of  this  paragraph applied  to  these two cases of assessment for  1951-52  and

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under  them  the  depreciation already  availed  of  by  the assessees  under  the Bhavnagar War Profits Act  had  to  be deducted   in  computing  the  written  down   value.    The correctness of this decision is challenged before us in C.A. Nos. 600 and 602 of 1962. The  Removal of Difficulties Order was made by  the  Central Government  on December 2, 1950, in exercise of  the  powers conferred  by s. 12 of the Finance Act, 1950, and Section  5 of the Opium and 226 and  Revenue Laws (Extension of Application) Act, 1950.   We are  concerned  in the present case only with s. 12  of  the Finance Act, 1950.  That section runs thus:- "If any difficulty arises in giving effect to the provisions of any of the Acts, rules or orders extended by section 3 or section  II  to any State or merged territory,  the  Central Government  may, by order, make such provision or give  such direction as appears to it to be necessary for removing  the difficulty." Section 3 of the Act had the effect of extending the  Indian Income-tax  Act,  1922,  to Part B States in  the  Union  of India.   It  was  not  disputed  that  it  was  within   the competence of the Central Government to make the Removal  of Difficulties Order, 1950, if any difficulty arose in  giving effect  to the Indian Income-tax Act in an area to which  it so  became  extended.   In  making  the  order  the  Central Government  has expressly said: "That  certain  difficulties had arisen in giving effect to the provisions of the  Indian Income-tax  Act,  1922........................  in  Part   B States"  and  so, the order was made.   In  Commissioner  of Income-tax Hyderabad v. Dewan Bahadur Ran; Gopal Mills Ltd., (1)  this Court held that it was for the Central  Government to determine if any difficulty of the nature indicated in s. 12  bad  arisen  and then to make such order  or  give  such direction  as appeared to it to be necessary to  remove  the difficultly.  It was in view of this decision that Mr. Kolah conceded  that  the  order was validly  made.   He  contends however  that  it  is only when  a  difficulty  is  actually experienced  in giving effect to the Indian  Income-tax  Act that the provision of the Order can come into operation in a particular  case. in the cases now under  consideration,  he argues, no such difficulty was actually experienced and  so, paragraph 2 would have no application. In  our  opinion,  the  High  Court  rightly  rejected  this contention.  The consequence of the Removal of  Difficulties Order being validly made under s. 12 (1)  [1961] 2 S. C. R. 318. 227 of  the Finance Act, 1950, is that paragraph 2 of the  Order (as  also  the other paragraphs) have to be applied  and  no exception can be made.  Paragraph 2 runs thus:- "In making any assessment under the Indian, Income-tax  Act, 1922,  all depreciation actually allowed under any  laws  or rules  of a Part B State’ relating to income-tax and  super- tax or any law relating to tax on profits of business  shall be   taken   into  account  in   computing   the   aggregate depreciation allowance referred to in sub-clause (c) of  the proviso  to  clause (iv) of sub-section 2, and  the  written down value under clause (b) of sub-section 5, of section 10, of the said Act." These words require "all depreciation actually allowed under any  laws or rules of a Part B State relating to  income-tax and  super-tax  or  any law relating to tax  on  profits  of business" to be taken into account in computing the  written down  value  under s. 10 (5) (b) of  the  Indian  Income-tax

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Act,-irrespective  of whether any difficulty has or has  not arisen  in  a  particular  case  in  giving  effect  to  the provisions of the Indian Income-tax Act.  What is  necessary in  law is that before an order can be made by  the  Central Government  under  s.  12, the Central  Government  must  be satisfied  that in certain cases difficulties have  actually arisen  in  giving effect to the provisions  of  the  Indian Income-tax Act.  Once on such satisfaction an order is  made it  is not again necessary for the application of the  order in  a particular case that difficulty must be found to  have arisen.  A separate Order under s. 12 has not got to be made each  for  particular  case.  The order  once  made  on  the satisfaction  of the Central Government that in  some  cases difficulties have arisen in giving effect to the  provisions of  the Indian Income-tax Act the order operates  under  its own  terms  and so in giving effect to the order it  is  not necessary  for the Income-tax Officer to see  first  whether any difficulty has arisen. We  are of opinion that whether any difficulty did  actually arise in the cases now under considera- 228 tion  in applying the Indian Income-tax Act, 1922,  in  this Part  B  State  or  not,  paragraph  2  of  the  Removal  of Difficulties  Order must be applied according to its  terms. It  is therefore not necessary to examine whether  any  such difficulty did arise in these cases. This  brings  us  to Mr. Kolab’s main  contention  that  the Bhavnagar   War  Profits  Act  is  not  one  of   the   laws depreciation  allowed under which has to be  deducted  under paragraph 2 of this Order.  He points out that the Bhavnagar War  Profits Act bad ceased to be in force long  before  the Part  B  State-the  United States  of  Saurasbtra-came  into existence.   It was therefore never a law of a Part B  State and  so depreciation which the assessee availed of under  it will  not come within the words "all  depreciation  actually allowed  under any laws or rules of a Part B State  relating to  income-tax and super-tax." This appears to  be  correct; but  the  question still remains whether the  Bhavnagar  War Profits Act is covered by the words "any law relating to tax on  profits of business" in the paragraph.  If it does,  the depreciation which the assessee availed of under the Act has to  be  deducted  in  computing  the  written  down   value. Analysing  the  clause: "all depreciation  actually  allowed under  any  laws  or rules of a Part  B  State  relating  to Income-tax  and  super-tax" or any law relating  to  tax  on profits on business," we notice that the words "of a Part  B State"  were used to qualify the phrase "any laws or  rules" in the first portion of the clause.  Similar words were  not used  to  qualify the words "any law" in  the  second  part. According to Mr. Kolah these words "of a Part B State"  were intended  to be read also after the words "any law"  in  the latter  portion and were omitted by way of ellipsis so  that the sentence might not appear cumbersome. Ellipsis  is  a well-known figure of speech by  which  words needed to complete the construction or sense are omitted  to produce  better  rhythm or balance in the structure  of  the sentence. After  careful  consideration we have however  come  to  the conclusion that the omission of the words 229 "    of  a Part B State" in this paragraph is not by way  of ellipsis  but  a deliberate omission with the  intention  of including  laws  which could not be stated to be laws  of  a part  B State but bad been laws in the same area at  a  time before they formed part of a Part B State.  If the  omission

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had  been  by way of ellipsis, as argued by  Mr.  Kolah,  it would  be  reasonable  to  think that  the  words  "any  law relating to tax" would also have been omitted and this  part of  the  paragraph  would have  read  as  "all  depreciation actually  allowed under any laws or rules of a Part B  State relating  to Income-tax and super-tax or tax on  profits  of business."  It also appears to us that if the intention  had not  been  to include the depreciation allowed under  a  law which  had been law in a component part of the Part B  State before  it  became  included in the Part  B  State,  it  was unnecessary to add the words "     or  any law  relating  to tax on profits of business." For, "a law relating to tax  on profits  of business" is also a law relating  to  Income-tax and, so, depreciation actually allowed under a law  relating to  tax  on profits of business which was law of  a  Part  B State would come within the first portion of the clause.  It is worth noticing in this connection that in 1949 when by an Ordinance  certain  taxation laws were  extended  to  Merged States  the  Central  Government made under  s.  8  of  that Ordinance  ’The  Taxation Laws (Merged States)  (Removal  of Difficulties)  Order,  1949".   Paragraph 2  of  that  Order merely  said  "all depreciation actually allowed  under  any laws  or rules of a merged State relating to Income-tax  and super-tax shall be taken into account." Nothing was said  in that  Order as regards " any law relating to tax on  profits of  business."  The Removal of Difficulties  Order  add  the words  "any  law relating to tax on  profits  of  business". This appears to have been done with the deliberate intention of  including  depreciation allowed under  such  laws,  even though  they  were  not laws "of a Part B State"  but  of  a component State. We  have  come  to the conclusion  that  the  Bhavnagar  War Profits Act is within the words "any law 230 relating  to tax on profits of business" in paragraph  2  of the  Removal of Difficulties Order.  We hold that  the  High Court  has rightly decided that the depreciation availed  of by  the assessee under the Bhavnagar War profits act  was  a deductible  amount in  computing the written down  value  of the assets. All  the appeals are therefore dismissed with costs.   There will be one set of hearing fee in all the appeals. Appeal dismissed.