( 1 ) THE Income Tax Appellate Tribunal, Ahmedabad Bench c, has referred the following question for the opinion of this Court :"whether the Tribunal was right in law and on facts in upholding the claim of the assessee for depreciation u/s 34 (2) (ii) specially when the proprietary business was converted into a partnership firm during the relevant accounting period?"

( 2 ) THE Assessment Year is 1977-78 and the accounting period is Financial Year 1976-77. The assessee was running a proprietary business in the name of Standard Rolling Mills and the said business was conducted for the period 1. 4. 1976 to 30. 6. 1976 during the financial year. With effect from 1. 7. 1976 the business, with all its assets and liabilities, was taken over by a new firm having the same business name. The assessees share in this partnership firm was 40 per cent. The assessee claimed depreciation and investment allowance as deduction against the profits from the proprietary business, which was carried on during the part of the year. The assessees claim was rejected by the Assessing Officer. The CIT (Appeals) allowed the assessees appeal holding that the assessee was entitled to both investment