MADON, J. - (1.)THIS case has been stated and three questions of law referred to us by the Maharashtra Sales Tax Tribunal under S. 39 of the Maharashtra Agrl. IT Act, 1962 (Maharashtra Act No. XLI of 1962) (hereinafter referred to as "the said Act"), the first two at the instance of the Commr. of Agrl. IT. and the third at the instance of the original assessee. These three questions are as follows:
"(1) Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in observing that the element of ownership of the assets used in deriving agricultural income is not a condition precedent to the claim of depreciation ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the opponent (that is, the original assessee), was entitled to claim depreciation on the assets on the basis of the original cost and not on the basis of cost price less depreciation allowable under the Act (that is, the Maharashtra Agrl. IT Act, 1962) or on the written down value disclosed by the books of account maintained by the opponent ? (3) Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the assessment made on the assessee was a valid assessment ?"

(2.)BEFORE we set out the material facts necessary for understanding the controversy between the parties we may state that the original respondent to this reference, Baijnath Mahadeo Thakur, died pending this reference. He had been assessed to agricultural income tax on the basis that he was he Karta of an HUF, and on his death the members of the said family have been brought on the record of this reference as respondents. We will, therefore, for the sake of convenience hereafter referred to the said Baijnath Mahadeo Thakur as "the assessee". The assessee owned agricultural lands at Vangaon in Taluka Dahanu in the District of Thane. The assessee was being assessed to income tax. It appears that the mamlatdar, Dahanu, gave information to the Sales Tax Officer, Palghar, District Thane, that the agricultural income of the assessee exceeded Rs. 36,000. It may be mentioned that for the purposes of the said Act the State Govt. has constituted the authorities under the Bombay ST. Act, 1959, to be the Agrl. IT. authorities under S. 20 of the said Act. The reason appears to be that having a ready made hierarchy of taxing authorities available, the State Govt. thought it advisable as also practicable to confer upon the same administrative hierarchy the assessment and tax collection functions under the said Act. That this was the underlying object is also apparent from S. 21 of the said Act under which the Tribunal constituted under the said Bombay Sales Tax Act is also to be the Tribunal for the purpose of hearing appeals under the said Act.
The reason for the mamlatdar giving the aforesaid information to the STO was that the latter was also the Agrl. ITO for the Palghar area which would have jurisdiction to tax the agricultural income, if any, of the assessee. The relevance of mentioning the figure of Rs. 36,000 was because under Sub S. (2) of S. 4 of the said Act agricultural income tax is payable in respect of agricultural income exceeding Rs. 36,000 at the rate of 50 naye paise for each rupee in excess of Rs. 36,000.

(3.)ON receipt of this information, the said STO by his letter dated February 14, 1967, intimated to the assessee the said information and called upon him to attend at the Inspection Bungalow, Dahanu, on February 24, 1967, without fail. The said letter further stated that information regarding agricultural income should be brought by the assessee from April 1, 1961, onwards. In pursuance of the said letter the assessee's nephew attended with the books of account at the Inspection .Bungalow, Dahanu, and those books were inspected by an inspector in the office of the STO, who, as mentioned before, was also the Agrl. ITO. The said Inspector made a report dated February 24, 1967. The said report showed that the turnover of the assessee during the asst. yr. 1961 62 was more than Rs. 36,000. Thereupon the said Agrl. ITO issued to the assessee a notice dated March 7, 1967. In view of the arguments advanced before us, it will be convenient to reproduce the said notice. It is as follows :
"Office of the Sales Tax Officer, Agrl. ITO, Palghar. To M/s Baijnath Mahadev Thakur, Vangaon,Taluka Dahanu. No. N(URO) Agrl I/B 1458 Palghar : Dt. 7 3 67. Sub : Assessment proceedings under S. 41 of the Maharashtra Agrl. IT Act,1962, for the year 1961 62. Gentlemen, (1) Whereas you were liable under S. 4 of the Act, did not furnish return under S. 22 of the Act, showing your agricultural income for the year ended on 31 3 62. (2) You are hereby directed to attend my office on 25 3 67 at Sales Tax Office, Palghar, at 10.30 a.m. with your books of account and to show cause why you should not be assessed under S. 41 of the Act for 1961 62 and why penalty under S. 29 of the Act should not be imposed.
Yours faithfully, Sd. Agrl. ITO. N.B: