Satyabrata Sinha, J. - (1.) This reference under Section 256(1) of the Income-tax Act, 1961, has been made by the Income-tax Appellate Tribunal, E-Bench, Calcutta, for consideration of the following questions : "(1) Whether, on the facts and in the circumstances of the case and in view of the provisions of Section 47 of the Indian Registration Act, the Tribunal was right in holding that the assessee was not owner of the assets which were purchased with effect from January 1, 1983, but the conveyance deed for which was registered on May 23, 1984, that is after the end of the previous year ? (2) Whether, on the facts, and in the circumstances of the case, the Tribunal was right in holding that the assessee was not entitled to depre ciation allowance and additional depreciation allowance in respect of the assets with effect from January 1, 1983, vide conveyance deed executed on May 23, 1984 ? (3) Whether, on the facts, and in the circumstances of the case, the Tribunal was right in holding that the assessee was not entitled to depreciation allowance and additional depreciation allowance in respect of the labour houses constructed by the assessee during the previous year, on the land, conveyance deed for which was registered after the close of the previous year although the deed expressly provided that the sale was with effect from January 1, 1983 ? (4) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the directors and promoters cannot be called 'agent' and that capital borrowed from them was not borrowed for the purpose of the assessee's business because it was used for acquisition of capital assets in the form of Ledo Tea Estate ? (5) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that a part of interest was disallowable under Section 40A(8) in respect of the interest paid to director and promoters on their current account ?"
(2.) In relation to questions Nos. 1, 2 and 3 the facts of the matter are as follows :
(3.) The assessee had purchased various assets including land, tea plants, buildings, plant and machinery, furniture and fixtures from Duncan Agro Industries Ltd. It had been carrying on business in the tea estate with effect from January 1, 1983. All revenues generated during the period January 1, 1983 to March 31, 1984, were taken into account by the Assessing Officer for computing the taxable income of the assessee-company for the assessment year in question. The conveyance deed was, however, executed on May 23, 1984, which contained a stipulation that all assets of Ledo Tea Estate were sold by the vendor to the assessee with effect from January 1, 1983, and that the business of the said tea estate was carried on by the assessee-company with effect from the said date. The petitioner claimed depreciation on the abovementioned assets which were rejected. The said order was upheld by the Commissioner of Income-tax (Appeals).;