Judgement

SIKRI, J.: These appeals by special leave are directed against the judgment of the High Court of Madhya Pradesh in a reference made to it by the Income-tax Appellate Tribunal, under S. 66(1) of the Indian Income-tax Act, 1922, hereinafter referred to as the Act. The Tribunal referred the following to the High Court:

"Whether, on the facts of the case and having regard to the provisions of paragraph 2 of the Taxation Laws (Merged States) (Removal of Difficulties) Order, 1949, and Cl. 8 of the Agreement made on 20th September, 1938 between the assessee and the State or Bhopal, the correct basis for computing the written down value of the depreciable assets as at 1st November, 1948 is the one which is adopted by the Income-tax Officer or the one adopted by the Appellant Assistant Commissioner?

2. The relevant facts are these. The respondent. M/s. Straw Products Ltd., Bhopal, hereinafter called the assessee, is a public limited company. It was incorporated in the erstwhile State of Bhopal in 1939 and was given the certificate of commencement of business on May 30, 1939. On September 20, 1938, the assessee entered into an agreement with the Government of Bhopal. Under the agree