The Assessing Officer is not justified in allowing depreciation allowance without material or without particulars required for depreciation allowance.

( 1 ) BY this reference application made under Section 256 (1) of the Income-tax Act, 1961, the Tribunal has referred the following questions for our opinion :"for the assessment years 1978-79 and 1979-80 : whether, on the facts and in the circumstances of the case, the Tribunal was justified in upholding the direction of the learned Commissioner of Income-tax (Appeals) to withdraw the depreciation on assets allowed by the Assessing Officer, though not claimed by the assessee ? for the assessment year 1979-80 : whether, on the facts and in the circumstances of the case, the Tribunal was justified in upholding the order of the learned Commissioner of Income-tax (Appeals) directing the computation of capital gain/loss on the sale of assets either by taking into consideration the original cost of the assets or their written down value after giving effect to his appellate order (i. e. , withdrawing depreciation) ?"

( 2 ) IN response to a notice under Section 139 (2) of the Income-tax Act, 1961, the assessee filed the returns on November 30, 1978, showing loss of Rs. 7,07,39,219. Those returns were revised and the assessee filed a revised return. In that, he reduced the loss to Rs. 6,02,55,970 and thereafter he filed another revised return on January 15, 1985, showing loss at Rs. 13,87,08,960. The income was assessed at a loss of Rs. 6,15,61,180. While computing the income, the Assessing Officer has allowed depreciation, though neither the assessee has asked for allowance of depreciation nor he has furnished the required details for allowance of depreciation under Section 32 read with Section 34 of the Act.

( 3 ) IN appeal before the Commissioner of Income-tax (Appeals), the assessee submits that when neither the assessee has claimed depreciation nor the required details were furnished, the Assessing Officer has wrongly allowed depreciation. The Assessing Officer allowed depreciation to the tune of Rs, 3,03,00,691 for the assessment year 1978-79 and to the tune of Rs. 2,48,96,503 for the assessment year 1979-80.

( 4 ) THE grievance of the assessee is that when neither the assessee has claimed depreciation nor the required details were furnished, the Assessing Officer should not allow depreciation during the years under consideration. The Commissioner of Income-tax (Appeals) in appeal has allowed the claim of the assessee holding that when neither the assessee claimed for depreciation nor he has furnished the required details, the Assessing Officer was not justified in allowing the depreciation to the assessee under Section 32 of the Income-tax Act. In appeal before the Tribunal, the Tribunal has affirmed the view taken by the Commissioner of Income-tax (Appeals ).

( 5 ) IN a case when neither the assessee claimed depreciation nor the required details were furnished, can the Assessing Officer allow depreciation under Section 32 of the Act ?

( 6 ) THE provisions of Section 32 provide for allowance of depreciation. Any building, machinery, plant or furniture owned by the assessee, wholly or partly, for the purpose of business and used for the purposes of the business, the assessee is entitled for depreciation subject to the provisions of Section 34 of the Act. The provisions of Section 34 of the Act laid down certain conditions for allowance of depreciation. Rule 5aa of the Income-tax Rules, 1962, prescribes the particulars for depreciation which are necessary to be furnished for allowance of depreciation. But that has come with effect from April 1, 1981, and the relevant assessment years before us are 1977-78 and 1978-79.

( 7 ) DR. Pal, learned counsel for the assessee, submits that the particulars which are referred in rule 5aa prior to this, in the written form itself these particulars were required to be furnished if the assessee claims depreciation. Therefore, unless these particulars are furnished, no depreciation allowance could be allowed.

( 8 ) LEARNED counsel for the Revenue, Mr. Agarwal, submits that t