COMMISSIONER OF INCOME TAX Vs. RAMLUBHAIYA R MALHOTRA

JUDGEMENT

(1.) The Income Tax Appellate Tribunal, Ahmedabad Bench 'C', has referred the following question for the opinion of this Court :

(2.) The Assessment Year is 1977-78 and the accounting period is Financial Year 1976-77. The assessee was running a proprietary business in the name of Standard Rolling Mills and the said business was conducted for the period 1.4.1976 to 30.6.1976 during the financial year. With effect from 1.7.1976 the business, with all its assets and liabilities, was taken over by a new firm having the same business name. The assessee's share in this partnership firm was 40 per cent. The assessee claimed depreciation and investment allowance as deduction against the profits from the proprietary business, which was carried on during the part of the year. The assessee's claim was rejected by the Assessing Officer. The CIT (Appeals) allowed the assessee's appeal holding that the assessee was entitled to both investment allowance and depreciation as claimed.

(3.) The revenue went in appeal before the Tribunal and the Tribunal, for the reasons stated in its order dated 29.11.1985, allowed the appeal of the revenue in part by holding that the assessee's claim for investment allowance was not justified. Insofar as the claim for depreciation was concerned, the order of CIT (Appeals) was affirmed by the Tribunal. It appears from the facts on record that the assessee has accepted the finding of the Tribunal as regards the disallowance of its claim for investment allowance, while the revenue has preferred the present reference in relation to the claim for depreciation, which has been allowed by the Tribunal.