Section 224C(5) in The U.P. Municipalities Act, 1916
(5)The gross amount payable to such licensee shall be the aggregate value of-the amounts specified below, -(i)the book value of all completed works in beneficial use pertaining to the water-works and taken over by the [Municipality] [Substituted by U.P. Act No. 12 of 1994.] (excluding works paid for by the consumers), less depreciation calculated in accordance with the Table appended to this section;(ii)the book value of works in progress taken over, excluding works e paid for by the consumers or prospective consumers;(iii)the book value of all stores, including spare parts taken over and in the case of used stores and spare parts, if taken over, such sum as may be decided upon by the Special Officer;(iv)the book value of all other fixed assets in use on the said date and taken over, less depreciation calculated in accordance with the said Table;(v)the book value of all plants and equipments existing on the said date, if taken over, but no longer in use owing to wear and tear or to obsolescence, to the extent such value has not been written off in accordance with the said Table.Explanation. - The book value of any fixed asset means its original cost, and shall comprise, -(i)the purchase price paid by the licensee for the assets, including the cost of delivery and all charges properly incurred in erecting and bringing the assets into beneficial use, as shown in the books of the licensee;(ii)the cost of supervision actually incurred, but not exceeding fifteen per cent of the amount referred to in paragraph (i) :Provided that before deciding the amount under this sub-section, the licensee shall be given an opportunity by the Special Officer of being heard, after giving him a notice of at least 15 days therefor.
