Estimated income assessment and separate depreciation allowance left no referable question of law under the Income-tax Act.

Where income is assessed on an estimated net profit basis after invoking section 145, depreciation is allowable separately and not absorbed in the estimate. The proposed reference under section 256(2) raised no referable question of law because the issue was already covered by the binding view on separate allowance of depreciation in estimated-income cases. The reference application was therefore rejected, and the Tribunal's view was left undisturbed.

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Issues: Whether, in a reference application under section 256(2) of the Income-tax Act, 1961, any referable question of law arose on the issue of allowance of depreciation where income had been estimated by applying a net profit rate after invoking section 145.

Analysis: The assessment was completed by estimating income on the basis of a net profit rate after resort to section 145. The Tribunal had affirmed the appellate view that depreciation was to be allowed separately from the estimated income. The question proposed for reference was already covered by the binding view that, in cases of estimated income, depreciation is allowable separately.

Conclusion: No referable question of law arose, and the reference application was rejected.

Final Conclusion: The assessee succeeded in resisting the reference, and the Tribunal's view on separate allowance of depreciation in estimated-income cases was left undisturbed.

Ratio Decidendi: Where income is determined by estimation on a net profit basis, depreciation is to be allowed separately, and no referable question of law arises on that issue.

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