Y.R.Meena, J. - (1.) By this reference application made under Section 256(1) of the Income-tax Act, 1961, the Tribunal has referred the following questions for our opinion : "For the assessment years 1978-79 and 1979-80 : Whether, on the facts and in the circumstances of the case, the Tribunal was justified in upholding the direction of the learned Commissioner of Income-tax (Appeals) to withdraw the depreciation on assets allowed by the Assessing Officer, though not claimed by the assessee ? For the assessment year 1979-80 : Whether, on the facts and in the circumstances of the case, the Tribunal was justified in upholding the order of the learned Commissioner of Income-tax (Appeals) directing the computation of capital gain/loss on the sale of assets either by taking into consideration the original cost of the assets or their written down value after giving effect to his appellate order (i.e., withdrawing depreciation) ?"
(2.) In response to a notice under Section 139(2) of the Income-tax Act, 1961, the assessee filed the returns on November 30, 1978, showing loss of Rs. 7,07,39,219. Those returns were revised and the assessee filed a revised return. In that, he reduced the loss to Rs. 6,02,55,970 and thereafter he filed another revised return on January 15, 1985, showing loss at Rs. 13,87,08,960. The income was assessed at a loss of Rs. 6,15,61,180. While computing the income, the Assessing Officer has allowed depreciation, though neither the assessee has asked for allowance of depreciation nor he has furnished the required details for allowance of depreciation under Section 32 read with Section 34 of the Act.
(3.) In appeal before the Commissioner of Income-tax (Appeals), the assessee submits that when neither the assessee has claimed depreciation nor the required details were furnished, the Assessing Officer has wrongly allowed depreciation. The Assessing Officer allowed depreciation to the tune of Rs, 3,03,00,691 for the assessment year 1978-79 and to the tune of Rs. 2,48,96,503 for the assessment year 1979-80.;