- (1.) These two appeals by certificate under S. 261 of the Income-tax Act, 1961 (for short 'the Act') are directed against the judgment dated November 27, 1981 of the Kerala High Court. The judgment is now reported in (1982) 135 ITR 19 : (1982 Tax LR 157) (FB). The following two questions were decided by the High Court : (para 4 of Tax LR) : "1. Whether on the facts and in the circumstances of the case, the Tribunal is right in law in deleting Rs. 1,260/- towards house rent under S. 40(a)(v) of the Income-tax Act, 1961 2. Whether on the facts and in the circumstances of the case, the Tribunal was justified in holding that the assessee did not have the right of substituting the market value as on 1-1-54 in respect of depreciable assets While the first question was referred at the instance of the revenue, the second question was at the instance of the assessee. Both the questions were, however, answered by the High Court in favour of the revenue and against the assessee.
(2.) The impugned judgment in so far as it answers the first question has been overruled by this Court in Commr. of Income-tax, Bombay v. Mafatlal Gangabhai and Co. (P) Ltd., (1996) 7 SCC 569 : (1996 AIR SCW 1288). Accordingly the answer to this question has to be given in favour of the assessee and against the revenue.
(3.) It is the second question on which arguments were addressed before us. While the revenue gets support from the decisions of the High Courts of Gujarat, Allahabad and Calcutta for upholding the impugned judgment, the assessee gets support from the decision of the Bombay High Court. Gujarat, Allahabad and Calcutta decisions are reported respectively in Rajnagar Vaktapur Ginning, Pressing and Manufacturing Co. Ltd. v. CIT, (1975) 99 ITR 264 : (1975 Tax LR 310), CIT v. Upper Doab Sugar Mills (1979) 116 ITR 240 : (1978 Tax LR 803) and India Jute Co. Ltd. v. CIT, (1982) 136 ITR 597 : 1981 Tax LR 1302). Bombay decision is reported in Goculdas Dossa and Co. v. J. P. Shah (1995) 211 ITR 706 : (1994 Tax LR 667).;