- (1.) These appeals pertain to one of the questions considered by the High Court under Section 256 (2) of the Income-tax Act, 1961 at the instance of the Revenue. The appeals pertain to assessment years 1973-74, 1974-75 and 1977-78 to 1980-81. The question as framed for the assessment years 1973-74, 1974-75 and 1977-78 was as follows :- "Whether, on the facts and in the circumstances of the case, the ITAT was justified in law in upholding the order of the CIT (A) on the ground that no injustice was caused to the revenue by the order passed by the CIT (A) in directing that the assessee was entitled to add a sum of Rs. 36,96,516/- to the cost of building and claim depreciation thereon -
(2.) The question is not very happily worded. A similar question was also raised in respect of the other assessment years. The question basically is : Whether the assessee is entitled to depreciation in respect of a sum of Rs. 36,96,516/- which it claimed as part of the actual cost of construction of a building constructed by it for business purposes.
(3.) The assessee had purchased an existing residential building bearing Nos. 18-20, Kasturba Gandhi Marg, New Delhi, in the year 1961. The assessee wanted to use that building for commercial purposes. For this purpose, it paid certain additional charges to the Development Officer of the Government of India and also extra ground rent in respect of the land. The built-up area then existing on that plot was 51,198 square feet. A formal agreement was executed on 21-10-1962 in this connection. Under the said agreement, the assessee had inter alia paid a sum of Rs. 3,65,875/- to the Land Development Officer, Government of India, as commercialisation charges in addition to the ground rent.;