JAWAHAR LAL GUPTA, J. - (1.) THE dispute relates to the asst. year 1983 84. The assessee filed a return, declaring a loss of Rs. 37,88,24,824. The AO finalised the assessment under S. 143(3) of the IT Act, 1961. The deductions claimed by the assessee under various heads, including on account of the forfeiture of Contributory Provident Fund and depreciation on spare engines were disallowed. It was observed that the assessee had forfeited a sum of Rs. 12,038 during the assessment year on account of the Contributory Provident Fund. This amount was liable to be added to the income of the assessee. As for depreciation on spare engines, the assessee had claimed an amount of Rs. 35,326. Even this claim was disallowed. Claim on other counts was also rejected. Ultimately, it was held that the total loss was Rs. 6,84,05,800.
(2.) AGGRIEVED by the order, the assessee filed an appeal. Vide his order, dt. 21st March, 1994, the CIT(A) allowed the appeal partly. It was held that the amount of Contributory Provident Fund forfeited by the assessee is "the property of the trust only and not that of the Corporation". Thus the claim of the assessee was accepted. Similarly, the claim even with regard to depreciation was accepted. Aggrieved by the order of the CIT(A), the Revenue filed an appeal. Various grounds were raised. However, the claim in respect of the aforesaid two items was declined. The appeal having been dismissed, the Revenue has now filed this second appeal under S. 260A of the IT Act, 1961. The Revenue maintains that the following two substantial questions of law arise for consideration of this Court : 1. "Whether, on the facts and circumstances of the case, the Tribunal was right in holding that mere forfeiture of Contributory Provident Fund did not give the amount the colour of income in the hands of the assessee and thus the amount has to be treated in accordance with the Provident Fund Scheme Rules ?" 2. "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in allowing depreciation on spare engines lying in the stock of the assessee ?"
(3.) MR . Sawhney contends that the Tribunal has erred in upholding the claim of the assessee in respect of deduction on account of forfeiture of the Contributory Provident Fund as well as depreciation. Is it so ?;