JUDGMENT

Gulati, J. - The assessee is a private limited company. Up to the previous year, relevant to the assessment year 1956-57, the assessee was carrying on a business of manufacture of soap and oil. This business was stopped in 1955. The factory thereafter used to be let out on hire. In the previous year, relevant to the assessment year 1965-66, which is the year in dispute the assessee started a business of manufacture of steel pipes and a part of the old machinery used for the manufacture of soap and oil was utilised in the new business. In the year 1956-57, which was the last year of the business of manufacture of soap and oil, the Income Tax Officer had worked out depreciation, which could not be fully set off against the profits, and, as such, a part of the depreciation was left unabsorbed. In the assessment year in dispute the assessee claimed that the unabsorbed depreciation to the extent that it pertained to the old machinery utilised in the new business should be brought forward and set off against the profits of the new business. This claim of the assessee was turned down by the Income Tax Officer as well as by the Appellate Assistant Commissioner of Income Tax on the