CHETAK CINEMA Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) BOTH these matters can be disposed of by one order as similar questions of fact and law are involved in them.

(2.) THE assessee entered into an agreement with M/s. Sanghi Brothers of Jodhpur for the purchase of the Chetak Cinema along with its building. machinery, furniture, etc. An agreement of sale was consequently executed on September 29, 1964. It is not disputed that, in pursuance of the terms of that agreement, Rs. 7,00,000 were paid by the assessee to the owner as part of the sale consideration against the total sale price fixed at Rs. 7,50,000. It is also not disputed that the possession of the property was handed over to the assessee in pursuance of the said agreement. THE assessee started running the cinema and claimed in his annual return depreciation in respect of the building, machinery, etc., for the assessment years 1966-67 and 1967-68. THE assessing authority disallowed the said depreciation on the ground that the assessee had not become the " owner " of the assets, because no deed of conveyance was either executed or registered in favour of the assessee. THE order of the ITO was, however, upheld in appeal both by the AAC and the Tribunal. THE assessee made an application under Section 256(1) to refer the question to the High Court, which according to him, involved an important question of law. THE learned members of the Tribunal, while disposing of that application, observed that the facts stated above undoubtedly raise a question of law, but since the answer to this question was patent in the light of the interpretation of Section 32 of the I.T. Act and the two Supreme Court cases, namely, Alapati Venkataramiah v. CIT[1965] 57 ITR 185 and CIT v. Bhurangya Coal Co. [1958] 34 ITR 802, the question need not be referred to the High Court. THE assessee's application was, therefore, dismissed. It is in these circumstances that these applications have been made by the assessee under Section 256(2) to order the Tribunal to state the case and refer the matter to the High Court.