Puttaswamy, J.—M/s. Amrut Talkies, Hubli, common petitioner in these petitions, is a registered partnership firm and is engaged in the business of running a cinema theatre in the city of Hubli. The petitioner is an assessee under the I.T. Act, 1961 (hereinafter referred to as "the Act"), on the file of the Second Income Tax Officer, Hubli Circle, Hubli (hereinafter referred to as "the ITO").

2. For the assessment years 1974-75 and 1975-76 (relevant to the periods ending on October 26, 1973, and November 13, 1974, respectively, the petitioner filed its returns before the ITO, inter alia, disclosing that it had constructed a permanent theatre at a cost of Rs. 4,79,050 or so supported by a valuation report of a registered valuer (Exhibit A) in support of the cost of construction of the theatre. On an examination of the returns filed by the petitioner, the ITO by his assessment orders dated March 31, 1975, and June 1, 1976 (Exhibits B and C) completed the assessments for the aforesaid years accepting the cost of construction as estimated by the registered valuer.

3. On a reference made by the ITO on December 18, 1965, the official Valuation Officer of the Department by his repo