1. A Division Bench of this Court referred this case to the Full Bench since the Revenue pressed for an examination of the correctness of the decisions of several High Courts in India on the construction of S 40(a)(v) of the Incometax Act and the Division Bench thought it appropriate that the question be examined by a Full Bench.

2. The two references arise nut of the same order of the Tncometax Appellate Tribunal, Cochin Bench. One of the references is at the instance of the Commissioner of Incometax and the other at the instance of the assessee. These arise from the order of the Tribunal disposing of the appeal for the assessment year 1971-72.

3. The assessee is a limited company. The company had considerable properties at Calicut and Mangalore. These were in the possession of the assessee from 1920 onwards. The assessee had claimed depreciation for the factory buildings and this had been allowed in the previous years. During the account ing year 1970-71 some properties were sold. The assessee showed capital gains computing the capital gains on the land and the capital gains on the factory buildings separately. The question of capital gains on the land is not relevant f