- (1.) THE Department has sought to refer the following two questions of law : "(1) Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct in quashing the order of the CIT(A) holding that the sale proceeds of scrap value are not taxable ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct in holding that the sale proceeds of scrap value amounting to Rs. 25,53,206 are not deductible from the actual cost of the block of assets to arrive at the figure of written down value for allowing depreciation on that asset in view of the provisions of ss. 43(1), 43(6) r/w S. 43(6)(c) of the IT Act, 1961 ?"
(2.) THE relevant facts are that the assessee had sold the scrap generated during the course of its business and the sale proceeds thereof at Rs. 23,53,206 were offered as its taxable income. The AO held that such sale proceeds were not taxable income, the AO maintained the addition while working out the taxable income of the assessee. The assessee raised ground No. 8 in its grounds of appeal taken before the Tribunal. The Tribunal upheld the order of the CIT(A). The Department has filed an application for referring two questions referred to above. The application has been rejected by the order dt. 4th June, 1997. The Department has sought reference again on these questions of law.
(3.) WE have heard Sri Prakash Krishna, learned counsel for the Department, and Sri Rajesh Kumar, learned counsel appearing for the assessee.;