ISMAIL J.

At the instance of the Commissioner of Income-tax, Madras, the Income-tax Appellate Tribunal, Madras Bench under section 256(1) of the Income-tax Act, 1961, has referred the following questions of law, arising out of the order of the Tribunal dated December 31, 1971, relating to the four assessment years 1964-65 to 1967-68 for the opinion of this court :

"(1) Whether, on the facts and in the circumstances of the case, Appellate Tribunal was right in law in holding that the disputed 50% of the technical aid fees to Messrs. Joseph Lucas (Industries) Ltd., England, was revenue expenditure and, therefore, liable to be allowed as deduction from the income of the assessee ?

(2) Whether, on the facts and in the circumstances, the Appellate Tribunal was right in law in holding that the initial depreciation should not be deducted in determining the written down value of assets for computation of capital employed in the newly established industrial undertaking under rule 19 of the Income-tax Rules, 1962 ?" *

The assessee is a limited company engaged in the manufacture of electrical equipments like generators, starters, regulators, etc., and distributors for commercial vehi