Report No. 12
51. Special provision computing statutory cost in the case of depreciable assets.-
Where the capital asset is an asset in respect of which a deduction on account of depreciation has been obtained by the assessee in any previous year either under this Act or under the Indian Income-tax Act, 1922 (11 of 1922), or any Act repealed by that Act, or under executive orders issued when the Indian Income-tax Act, 1886 (2 of 1886), was in force, the provisions of section 50 [preceding section regarding determination of statutory cost] shall be subject to the following modifications:-
(1) The written down value, as defined in section 42 clause (7) [ section 10(5)], of the asset, as adjusted, shall be taken as the statutory cost of the asset.
[Section 12B(2), 2nd proviso, part]
(2) Where under any provision of section 50 [preceding section regarding computation of statutory cost] the fair market value of the asset on the 1st day of January, 1954, is to be taken into account at the option of the assessee, then, the statutory cost of the asset shall, at the option of the assessee, be the fair market value of the asset on the said date, as reduced by the amount of depreciation, if any, allowed to the assessee after the said date, and as adjusted.
[Section 128(2), proviso, part]