JUDGMENT

SABYASACHI MUKHARJI, J.: — These appeals are by certificate from the decision of the High Court of Bombay dated 21st June, 1973 whereby the High Court had declined the application made under Sec. 256(2) of the Income-tax Act, 1961 (hereinafter called the Act) wherein the assessee sought two questions to be referred to the High Court. The questions were :

(1) Whether, on the facts and in the circumstances of the case, the re-assessment proceedings under Sec. 147(a) of the Income- tax Act, 1961, initiated by the Income-tax Officer for the assessment years 1955-56 to 1962-63 against the assessee were valid in law?

(2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in upholding the action under Sec. 147(a) of the Income-tax Act, 1961 for the assessment years 1955-56 to 1962-63?

2. The real question, therefore, is whether there were facts from which it could be believed that there was failure or omission to disclose fully and truly all material facts necessary for the assessment as a result of which income has escaped assessment. The assessment was sought to be re-opened for the years 1955-56 to 1962-63 (for failure to disclose fully and truly all material facts). It is wellsettled that the obligation of the assessee is to disclose only primary facts and not inferential facts - See Calcutta Discount Co. Ltd. v. Income-tax Officer, Companies District I, Calcutta, 41 ITR 191 : (AIR 1961 SC 372). There must be, therefore, (a) full disclosure, and (b) true disclosure of all material facts. What facts are material for a particular case would depend upon the facts and circumstances of each case, (c) there must be escapement of tax or under-assessment due to such failure or omission.

3. In this case the reason for the belief of the Income-tax Officer was that the assessee had obtained depreciation at 6 per cent on the assets which were masonry works but the assets really consisted of earth work wholly or substantially. If that was the position then the assessee was not entitled to depreciation as was granted. The question, is, whether the assess had disclosed the nature of the masonry work and whether the nature of the asset had been fully and truly disclosed.

4. The assessees case was that a partnership business carried on by M/s. Indo-Aden Salt Works Co. was taken over by the assessee by an agreement dated 24th August, 1949 and during the assessment year 1950-51 the said agreement dated 24th August, 1949 as well as the Valuation Report had been filed before the assessing authority. It is, further, the case of assessee that there was discussion on this Valuation Report. It further appears from the assessment Order and the affidavit that the Valuation Report was discussed and the amount of depreciation was more or less agreed to between the parties. The revenues case, on the other hand, is that which portion of the assets consisting of masonry work and which of earth work was not discussed. or disclosed. The assessees contention before the revenue authorities was that the primary facts were discussed fully and it was open to the revenue to examine into this aspect fully and it was not possible after the lapse of such a long time to say actually whether what portion of asset consisted of earth-work has been disclosed or not. It appears, however, from the order of the Tribunal that by its last letter addressed to the Income-tax Officer the assessee had conveyed its agreement that for the purpose of depreciation the value should be taken as Rs. 20,31,000 in the aggregate, in the assessment. The Tribunal has, further, found that in granting the depreciation the I.T.O. did not discuss the point whether the assets were constructed of masonry or made of earth and the I.T.O. did not exclude for depreciation the value of reservoirs, salt pans and piers and condensers and channels made of earth but allowed the depreciation claim of the assessee on the entire value of the reservoirs, salt pans and piers an