SABYASACHI MUKHARJI, J.

( 1 ) IN this judgment, we propose to deal with these two references, because these relate to a common question relating to the same assessee for different assessment years. We shall, however, have to refer to a slight difference in the findings of the AAC in respect of one year, viz. , the order passed by the AAC in Income-tax Reference No. 670a of 1972, which would be relevant and to which we shall refer at the relevant time.

( 2 ) THE assessee is a non-resident shipping company registered in Sweden. So far as the first reference in concerned, the assessment year under consideration is 1963-64, the corresponding accounting year being the year ending December 31, 1962. The ITO had not allowed depreciation on the two ships, viz. , Bali and Mindore, which were acquired in the year 1941 on the ground that these two ships were acquired more than twenty years ago. The ITO computed the total income at Rs. 1,63,572. It will be relevant for the present purpose to refer to certain portions of the order of the ITO. Dealing with the depreciation on these two vessels, the ITO observed, inter alia, as follows : "deduct : Depreciation on vessels for reasons discussed i

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