The facts in that case were that prior to January 26, 1950, when the erstwhile State of Hyderabad merged in the Union of India and became a Part B State, the respondent company was assessed to Income tax under the Hyderabad Income tax Act, under which depreciation allowance was given to it on the basis of the written down value of its assets, such as buildings, machinery plants, etc., in accordance with clause (c) of section 12(5) of that Act, which provided that in the case of assets acquired before the previous year and before the commencement of the Act, the written down value would be the actual cost to the assessee less (i) depreciation at the rates applicable to the assets calculat ed on the actual costs for the first year since acquisition and for the next year on the actual cost diminished by the depreciation allowance for one year and so on, for each year upto the commencement of that Act and (ii) depreciation actually allowed to the assessee 12 on such assets for each financial year after the commence ment of the Act.