Taxability of Sale Proceed of Assets Purchased before introduction of block concept and sale thereafter

RELEVANT PARAGRAPH 4. In the Lead Matter, the assessee who is the manufacturer of soft drinks, purchased bottles and crates, each item of which costed less than Rs. 5,000/- and, therefore, was entitled to and allowed 100% depreciation on the cost of the said bottles and crates, in the year in which they were acquired, under the proviso to Section 32(1)(ii) of the Income Tax Act, 1961 (“1961 Act” for short). When bottles and crates got worn out, they were sold by the assessee and proceeds therefrom were shown as “miscellaneous income” in the subsequent years. If these sa...