1985 (9) TMI 8

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....e Tribunal to submit the statements of cases under section 256(2) of the Income-tax Act and to refer the following questions of law for its decision, namely: " (i) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the Appellate Assistant Commissioner was justified in deleting the amount of Rs. 38,770 and thereby upholding the order of the Appellate Assistant Commissioner ? (ii) Whether, or the facts and in the circumstances of the case, the Tribunal was right in law in upholding the order of the Appellate Assistant Commissioner in directing the Income-tax Officer to allow depreciation ?" The facts which are material for answering the above questions are as follows Chironjilal,....

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....ference of Rs. 1,03,385 and accordingly took this amount as profit under section 41(2) of the Income-tax Act. The share of each of the two assessees who are respondents, here in the reference, came to Rs. 38,770. The assessment in respect of these two assessees respondents were done accordingly by the Income-tax Officer. Being aggrieved, the assessee preferred an appeal before the Appellate Assistant Commissioner and contended therein, that since there was no sale or transfer of the property for a price, the aforesaid amount which has been assessed under s. 41(2) of the Income-tax Act deserves to be deleted. The Appellate Assistant Commissioner, vide his order dated February 7, 1975, accepted the contentions of the assessees/respondents ....

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....ual cost and the written down value is chargeable to income-tax as income of the business of the previous year in which the moneys payable for the aforesaid assets become due. From the facts and circumstances of the case as also from the statement of the case submitted to this court, it is clear that the assessees/respondents did not sell the " Jagdish Rice Mill, Dhamtari " to " M/s. Jagdish Rice Mill, Dhamtari ", in which the assessees/respondents were also the partners but had only handed it over to the new partnership firm. In view of this clear finding, in our opinion, both the Appellate Assistant Commissioner and the Tribunal were right in holding that the provision of section 41(2) of the Income-tax Act has no application, as there wa....