( 1 ) IN this reference under Section 256 (1) of the I. T. Act, 1961, the following question has been referred to this court:" Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that depreciation debited in the accounts was ' expenditure incurred ' by the assessee within the meaning of Section 44a of the I. T. Act, 1961, and should be deducted in computing the deficiency under the said section for the assessment year 1969-70 ? "

( 2 ) THE assessee is the Indian Jute Mills Association and the relevant assessment year is 1969-70, corresponding previous year being the year ended on 31st December, 1968. The assessee had income from interest on securities, income from jute chronicle and interest. The assessee's total income from these sources was Rs. 98,835. Before the ITO, by a letter dated 6th October, 1961, the assessee claimed the benefit of deduction of deficiency for Rs. 19,934 in accordance with the provisions of Section 44a of the I. T. Act, 1961. Along with the said letter, a computation showing the said deficiency of Rs. 19,934 was filed and this included a sum of Rs. 14,846 representing in respect of furnit