HARRIES, C.J.

1. THIS is a reference made by the Tribunal under s. 66 of the Indian IT Act at the instance of the assessees. The question which has been formulated for the opinion of this Court is as follows :

"Whether, on the facts and in the circumstances of this case, the Tribunal was right in holding that the unabsorbed depreciation of the end of the year 1938-39, which was not given effect to in the subsequent years, could not be treated as part of the allowable depreciation for the relevant assessment years which are asst. yrs. 1941-42, 1942-43 and 1943-44."

2. THE assessees, M/s Isthmian Steamship Co. of New York, are assessed in India as a company through their agents, M/s Angus Co. Ltd. In the three relevant assessment years which are referred to in the question as also for the asst. yr. 1940-41, the unabsorbed depreciation as at the end of the asst. yr. 1938- 39 was not allowed to be carried forward by the ITO. For the asst. yr. 1940-41 the assessees did not appeal against this order and that assessment became final. In the three assessments from 1941 onwards three appeals were filed and the assessees contended that their unabsorbed depreciation at the end of the as