Judgment

D.P. Wadhwa, J.—A common question of law arises in these appeals. It is :

"Whether, on the facts and in the circumstances of the case, the Tribunal was right in coming to the conclusion that the Income-tax Officer could not grant depreciation allowance to the assessee under the Income-tax Act, 1961 when the same was not claimed by the assessee?"

2. The question was referred at the instance of Revenue to the High Court by the Income Tax Appellate Tribunal (‘Tribunal’ for short) for its opinion and answered in affirmative in favour of the assessee and against the Revenue.

3. This question has been answered differently by various High Courts one in favour of the assessee and the other in favour of the Revenue.

4. Section 32 has since been amended by the Taxation Laws (Amendment and Miscellaneous Provisions) Act, 1986, with effect from 1.4.1988. However, the answer to the question remains of substantial importance as various matters are stated to be pending in the High Courts relating to Assessment Years prior to 1.4.1988. Section 32 as it stood prior to 1.4.1988, in relevant part, is as under :

"32. (1) In respect of depreciation of buildings, machinery, plant or furniture owned by