JAGANNATHA SHETTY, J.

( 1 ) THE question that has been referred for the opinion of this court at the instance of the department under s. 256 (1) of the. T. Act, 1961, reads : "whether on the facts and in the circumstances of the case, the ITAT is justified in law in holding that depreciation should be allowed on roads ?"

( 2 ) THE facts behind the legal formulation are as follows :

( 3 ) THE assessee is a turf club which has been formed to run races for the benefit of jockeys, trainees, horse owners, and to entertain others. For the assessment year 1976-77, the assessee had incurred a sum of Rs. 5,40,862 on asphalting of roads within the race course premises. The assessee claimed that it was a revenue expenditure. The assessing authority upon perusal of the bills disallowed some part of the claim on the ground that there was capital expenditure in the sum of Rs. 1,80,000. Upon appeal, the Commissioner (Appeals) upheld the assessment relating to the said capital expenditure of Rs. 1,80,000 but allowed depreciation on the said amount at the prescribed rate. The appeal preferred by the Revenue was dismissed by confirming the order of the Commissioner (Appeals ).

( 4 ) IN this refere

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