B. J. DIVAN C.J. :- This case was referred by myself and Raghuvir, J. to a Full Bench in view of the fact that the view taken by this High Court in V. D. Rajaratnam v. Commr. of Income Tax, 68 ITR 19 and Commr. of Income-tax v. K.S. Reddy, 103 ITR 822 : (1975 Tax LR 869) (Andh Pra) is contrary to the view taken by the Madras High Court, Kerala High Court and Gujarat High Court and I myself sitting in the Gujarat High Court in a Division Bench specifically dissented from the view taken by this High Court in Commissioner of Income-tax v. K.S. Reddy, 103 ITR 822 : (1975 Tax LR 869) (Andh Pra) and under these circumstances we felt it desirable that the question is finally settled by a larger Bench.

2. The question, which has been referred to the High Court by the Income-tax Appellate Tribunal is as follows:

'Whether on the facts and in the circumstances of the case, the Tribunal was justified in law in giving directions to the Appellate Assistant Commissioner that the value of the materials should not be taken into consideration for estimating the net income for the assessment years 1964-65 to 1967-68?"

3. We are concerned with assessment years 1964-65 to 1967-68. The assessee i