K.S. Paripoornan, J.
1. At the instance of an assessee to agricultural income-tax, the Deputy Commissioner of Agricultural Income-tax and Sales Tax, Kozhikode, has referred the following question of law for the decision of this court :
'Whether, on the facts and in the circumstances of the case, the applicant is not entitled to depreciation on the actual cost of acquisition of motor car bearing Registration No. KRD 57 as no depreciation had been actually allowed for the assessment years 1979-80, 1980-81 and1981-82?'
2. The matter relates to the assessment year 1982-83 for which the accounting period ended on March 31, 1982. For this assessment year, amongst other things, the assessee claimed depreciation on motor car KRD 57. The car was purchased on November 29, 1978, for a sum of Rs. 38,256. The Agricultural Income-tax Officer fixed the written down value of the car, for the purpose of allowing depreciation for this year (1982-83), at Rs. 19,039. This was so done after deducting the depreciation value at 20 per cent. per year for the previous years from 1978-79. The depreciation amount for the previous year 1982-83 was Rs. 3,808 and 50 per cent. of the same, i.e., Rs. 1,904, was apportioned towards agricultural purposes and was allowed as deduction in computing the total income of the assessee. Depreciation was allowed only on the notional written down value of the car for the accounting year 1981-82 (assessment year1982-83). An important aspect to be borne in mind in this connection is that no depreciation was either claimed or allowed for the assessment years 1979-80, 1980-81 and 1981-82. In revision, the above order of the Agricultural Income-tax Officer was upheld. The Deputy Commissionerof Agricultural Income-tax and Sales Tax (Appeals) stated that the depreciation allowed on the car is in accordance with law. The plea of the assessee that the question whether depreciation was not claimed nor allowed in the previous assessments is not a relevant factor and that the full value of the car ought to have been adopted by the assessing authority in calculating the amount of depreciation for the assessment year 1982-83 was repelled. It is thereafter at the instance of the assessee that the question of law formulated hereinabove has been referred for the decision of this court..
3. We heard counsel. The statutory provisions relevant for the purpose of appreciating the plea urged by the assessee are the following :
'Section 5 of the Agricultural Income-tax Act, 1950 :
5. Computation of agricultural income.--The agricultural income of a person shall be computed after making the following deductions, namely-- . . .
(1) in respect of depreciation of buildings, machinery, plant and furniture which are the property of the assessee and are required for the purpose of deriving the agricultural income, a sum equivalent to such percentage on the written down value thereof as may in any case or class of cases be prescribed, and where the buildings have been newly erected or the machinery or plant newly installed, a further sum subject to such conditions as may be prescribed :
Provided that full particulars have been duly furnished : . . . Explanation 1. . . and 'written down value' means -
(i) in the case of assets acquired in the previous year, the actual cost to the assessee ; and
(ii) in the case of assets acquired before the previous year the actual cost to the assessee less such sum as may be prescribed. '
4. It is clear that, in respect of the motor car which is the property of the assessee and is required for the purpose of deriving agricultural income, depreciation on the written down value of the motor car is allowed. The 'written down value' means, in the case of assets acquired before the previous year, the actual cost to the assessee less such sum as may be prescribed. (In this case, the car was purchased on November 29, 1978, long before the previous year). It is common ground that the assessee has furnished full particulars for claiming depreciation. The statutory authorities held that the assessee made no claim for deductionof depreciation on the motor car for the previous years and, after four years, the value of the motor car would not be the same as that of the original purchase amount and the failure to claim and obtain the eligible deduction for the previous years cannot be taken advantage of to claim depreciation on the full purchase value of the car. In coming to the said conclusion, the statutory authorities have placed undue reliance on rule 13 of the Kerala Agricultural Income-tax Rules, 1951. Rule 13 reads as follows :
'13. In the case of assets acquired before the previous year, the written down value shall be the actual cost of the assets so acquired less all depreciation actually allowed in respect of such assets under the Agricultural Income-tax Act, 1950, or any law relating to agricultural income-tax that was in force in the State prior to the commencement of the said Act.'
5. We are of the view that rule 13 of the Agricultural Income-tax Rules, 1951, has no application to the present case. The said rule provides that the written down value shall be the actual cost of the assets so acquired less all depreciation actually allowed in respect of such assets, either under the Agricultural Income-tax Act, 1950, or the corresponding Act in force prior thereto. Under Section 5(1) of the Agricultural Income-tax Act, 1950, read with Explanation 1, in the case of assets acquired before the previous year, depreciation is allowed, and the basis is the actual cost to the assessce less such sum as may be prescribed. We are not invited to any rule by which any prescription has been made for deducting any particular sum from the actual cost to the assessee. In the absence of any prescription in the case of assets acquired before the previous year, the actual cost of the assets to the assessee alone is the determining factor. A substantially similar provision that occurred in the Income-tax Act (section 10(5) of the Act of 1922) came up for consideration before the Calcutta High Court in CIT v. Kamala Mills Ltd. : [1949]17ITR130(Cal) . Under the said Act, 'written down value' means, in the case of assets acquired before the previous year, the actual cost to the assessee less all depreciation actually allowed to him. The court held that the words 'actually allowed' means the allowance actually given effect to and the argument that the expression 'actually allowed' means 'allowable under the law in force' cannot be accepted. Similarly, in Dharampur Leather Cloth Co. Ltd. v. CIT : [1965]55ITR329(Bom) , the Bombay High Court, construing Section 10(5)(b) of the Indian Income-tax Act, 1922, observed thus (at page 336) :
'It necessarily follows that if in the prior years no depreciation has been actually allowed, then the actual cost incurred by the assessce for acquiring the machinery would be the written down value of the machinery. It is further clear that if the assessee desired to claim depreciation, he must supply the required particulars. In the event the particulars are not supplied by the assessee then depreciation is not allowed to him. It is an admitted position that at no time prior to the assessment year 1955-56, the assessee had filed any returns or that he had claimed any depreciation and in support of it supplied any particulars or that any depreciation on the machinery had actually been allowed. It is not shown to us that it is obligatory on the assessee to claim depreciation in every year of assessment, and in the event of his failure to do so, he forfeits the claim therefor or that the cost price gets automatically reduced by the allowable amount of depreciation. That being the position, it is difficult to hold that the assessee is not entitled to claim depreciation on the basis that the cost price of the machinery, etc., was the written down value thereof for the purpose of ascertaining the amount of depreciation allowable to him, and it was not open to the income-tax authorities to compute the depreciation on the basis that depreciation had been claimed in every year and allowed to the assessee.'
6. In the instant case, under the Act, the crucial words are to the effect 'the actual cost to the assessee less such sum as may be prescribed'. In the Calcutta and Bombay decisions, though the assets were acquired before the previous year, no depreciation was factually allowed 'in those years as contemplated by the statute, and so the court held that depreciation should be on the value of the assets at the cost price incurred by the assessee. In the instant case, in the absence of any prescription as contemplated by the Agricultural Income-tax Act, 1950, in the case of assets acquired before the previous year, depreciation should be allowed on the actual cost to the assessee. We arc of the view that the assessee is entitled to depreciation on the actual cost of acquisition of the motor car bearing Registration No. KRD 57 even though no depreciation was actually claimed and allowed for the assessment years 1979-80, 1980-81 and 1981-82.
7. We answer the question referred to us in the negative and hold that the assessee is entitled to depreciation on the actual cost of acquisition of the motor car. We answer the question in favour of the assessee and against the Revenue.
8. A copy of this judgment under the seal of this court and the signature of the Registrar shall be forwarded to the Commissioner of Agricultural Income-tax, Kerala, Trivandrum.