HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE
Commissioner of Income Tax, Madras v. Mir Mohd. Ali, Bus Owner, Vellore
Civil Appeal No. 145 of 1963
[1964] 7 SCR 846 ·
Indian Income Tax Act, 1922: section 10(2)(vi), second paragraph, and section 10(2)(via)
Sources & disclosures includedDownload original judgment / order
3-judge bench; majority 2:1 · K. Subba Rao, J. · J. C. Shah, J. · S. M. Sikri, J.
Assessment years: 1950-51
01 · Facts of the case
For the year ending 31 March 1950, a Vellore bus operator replaced petrol engines in two buses with new diesel engines costing Rs. 18,544. Normal depreciation was allowed, but initial and additional depreciation was refused on the ground that an engine was merely part of a vehicle. The High Court corrected an accidental omission in the referred question to cover both relevant clauses and answered it for the assessee (SCR pp. 847-848; PDF pp. 2-3).
Source: Primary judgment: facts
02 · Discussion by the Hon’ble Court
The majority gave machinery its ordinary meaning consistently across the connected depreciation provisions. A diesel engine was a mechanical contrivance qualifying as machinery even when used with another machine. Requirements of newness and installation did not redefine machinery as an independently usable business unit. Fixing an engine in a vehicle placed it in position for service and constituted installation (SCR pp. 850-853; PDF pp. 5-8). Shah J dissented: in his view the initial allowance required a self-contained unit used in this transport business, so replacement of a component was insufficient (SCR pp. 853-857; PDF pp. 8-12).
Source: Primary judgment: discussion
03 · Judicial decision
By the majority of Subba Rao and Sikri JJ, the Court upheld the affirmative answer allowing extra depreciation under sections 10(2)(vi) and 10(2)(via) and dismissed Revenue's appeal with costs. The formal order followed the majority notwithstanding Shah J's dissent (SCR pp. 853 and 857; PDF pp. 8 and 12).
Source: Primary judgment: decision
04 · Outcome / in whose favour
In favour of the assessee by a two-to-one majority. New diesel engines fitted in replacement of the existing engines qualified under the historical allowances at issue (SCR pp. 853 and 857; PDF pp. 8 and 12).
Source: Primary judgment: outcome
05 · AKHB REVIEW POINT
AKHB analysis: establish the acquired asset's technical identity, newness, ownership, installation and use, and distinguish the substantive definition of machinery from additional eligibility conditions. Cite the majority's reasoning expressly and check current depreciation conditions afresh before applying this component-replacement principle (analysis based on SCR pp. 850-853 and 857; PDF pp. 5-8 and 12).
Source: Primary judgment: reviewPoint
Source & verification
Download original judgment / order · Open cited source rendition
Full 12-page SCR report read and checked. The editorial headnote was distinguished from the judgment text and operative order.
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Statutory scope
The decision applies time-specific initial and additional depreciation under the 1922 Act. It does not decide eligibility under present section 32, current vehicle restrictions or block-of-assets rules.
Later treatment
Source checked 2026-10-10. Later judicial treatment and current statutory applicability have not been comprehensively checked; no current-law or citator clearance is represented.
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