( 1 ) AT the instance of the Commissioner of Income-tax, Andhra Pradesh-I, Hyderabad, the Income-tax Appellate Tribunal, Hyderabad, made this reference under section 256 (1) of the Income-tax Act, 1961, for the opinion of the High Court on the following question of law :"whether, on the facts and in the circumstances, the assessment made on the assessee for the assessment year 1968-69 was valid. "

( 2 ) WHEN this reference came up before a Division Bench of this court, it referred the case to a Full Bench to resolve the difference of opinion expressed by two Division Benches in Ch. Atchaiah v. ITO [1979] 116 ITR 675 and Choudhary Brothers v. CIT [1986] 158 ITR 224. It, however, added these two questions for the opinion of the Full Bench :" (1) Under what circumstances can one Division Bench differ from the view of an earlier Division Bench; and (2) Under what circumstances can the doctrine of per incuriam be applied by a co-ordinate Division Bench for not following the earlier binding precedent of another Division Bench. "

( 3 ) FIRST, we shall take up the question referred to this court by the Income-tax Appellate Tribunal. Here it would be appropriate to notice the facts giving ris

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