( 1 ) THE Income Tax Appellate Tribunal, Ahmedabad Bench b has referred the following question under section 256 (1) of the Income Tax Act,1961 (hereinafter referred to as the Act ). "whether on the facts and in the circumstances of the case the Tribunal was right in law in holding that the assessee was not entitled to deduction u/s. 32 (1) (iv) of the Act?"

( 2 ) THE assessee is a firm of Chartered Accountants having its offices at Ahmedabad, Petlad and Nadiad. The assessment year is 1984-85 and the relevant accounting period is financial year ending on 31/3/1984. The assessee made a claim in respect of initial depreciation under section 32 (1) (iv) of the Act on the cost of building erected during the year at Petlad. The said claim was negatived by the Income Tax Officer as according to him the said provision was meant to apply only in case of assessees who carried on business and not in the case of assessees who are involved in profession. The assessee challenged the assessment order and the C. I. T. (Appeals) relying upon the decision of Supreme Court in the case of Barendra Prasad Ray and others Vs. Income Tax Officer, 129 I. T. R. 295 accepted the claim of the assessee and directed the Income Tax Officer to grant initial depreciation at 40% in respect of building erected by the assessee.

( 3 ) THE revenue went in appeal before the Tribunal and the Tribunal came to the conclusion that the assessee was not entitled to the relief claimed by it. According to the Tribunal the decision of the Supreme Court in the case of Barendra Prasad Ray (supra) was rendered on the particular facts of the case and it was restricted to the situation prevailing therein. It was further observed by the Tribunal that the said decision of the Supreme Court was not meant to be applied to every case irrespective of the facts. The Tribunal also took note of the difference between provisions of section 32 (1) of the Act and section 32 (1) (iv) of the Act and held that wherever legislature intended to give particular relief to an assessee carrying on profession it was specifically provided in the statute and where the scope of the deduction was to be restricted to business only the word profession was omitted.

( 4 ) MR. R. K. PATEL, learned Advocate assailed the order of the Tribunal by referring to the opening portion of section 32 (1) of the Act, wherein the legislature has specifically used the expression business or profession and contended that sub-clause (iv) was to be governed by the opening portion of the section and further that it was not necessary for the legislature to repeat both the words in each and every clause, the legislature having used both the words in the beginning of the section. It was further contended that the definition of both the terms viz. business in section 2 (13) of the Act and profession in section 2 (36) of the Act are inclusive definition, that opening portion of section 2 which deals with definitions reads "in this Act, unless the context otherwise requires, -" and hence according to him the terms will have to be read as interchangeable or at least one term carrying within its fold other term also if the context so required.

( 5 ) THEREAFTER, our attention was drawn to Circular No. 202 dated 5/7/1976 issued by the Central Board of Direct Taxes by way of Explanatory Note on provisions relating to Direct Taxes as amended by the Finance Act,1976, to point out that the said circular while dealing with the amendment in section 32 (1) (iv) of the Act has used the word tax Payer in para 21. 1 of the said circular. Thus according to the Counsel for the assessee legislative intent was very clear in as much as the term business used in section 32 (1) (iv) of the Act also included profession; that the assessee should be held to be entitled to the relief accordingly.

( 6 ) MR. PATEL further referred to Supreme Court decision in the case of C. I. T. vs. J. H. GOTLA, 156 I. T. R. 323 and urged that where the plain