Judgement

SIKRI, J. : At the instance of the Commissioner of Income-tax, the Appellate Tribunal, Delhi Bench "C", referred the following question:

Whether the cost of land is entitled to depreciation under the schedule to the Income-tax Act along with the cost of the building standing thereon?"

2. This question arose out of the following facts: The respondent, M/s. Alps Theatre, hereinafter referred to as the assessee, carries on business as exhibitor of films. The Income-tax Officer initiated proceedings under S. .34 (1) (b) of the Indian Income-tax Act, 1922, on the ground that in the original assessment depreciation was allowed on the entire cost of Rs. 85 091 shown as cost of the building which included Rs. 12,000 as cost of land. The Incometax Officer, by his order dated February 22 1959, recomputed I the depreciation, excluding cost of land. The assessee appealed the Appellate Assistant Commissioner. The Appellate Assistant Commissioner upheld the order of the Income -tax Officer. The assessee then appealed to the Appellate Tribunal which accepted the appeal. In accepting the appeal it observed as follows :

"You cannot conceive of a building without the land beneath it. It is not