Law:

Section:

Section 256 of the Income-tax Act, 1961 - Reference - Question of fact - Assessee claimed depreciation at 6 per cent on assets alleged to be masonry works but actually comprising substantial portion relating to earth work - Claim was allowed by the ITO without detailed discussion though assessee had not filed valuation report or statement indicating portions relating to masonry work and earth work separately - Tribunal held that assessee had not fully disclosed primary facts and hence ITO would be justified in reopening assessment - Whether Tribunal's finding was one of fact so that no referable question of law would arise - Held, yes Section 147(a ) of the Income-tax Act, 1961 - Reassessment - Non-disclosure of primary facts - Whether, on facts mentioned under 'Reference - Question of fact', there was no full and true disclosure of material facts by assessee so that reassessment was justified - Held, yes Facts The assessee had taken over a partnership business by an agreement dated 24-8-1949 and had filed the relevant valuation report before the ITO during the assessment year 1950-51. For the assessment years 1955-56 to 1962-63 the assessee claimed depreciation at 6 per cent on its assets, by treating them as relating to masonry works, though a substantial portion of the assets related to earth work on which no depreciation was admissible. The claim was not supported by any valuation report or statement filed by the assessee. The Tribunal found that in granting the depreciation the ITO did not discuss the point whether the assets were constructed of masonry or made of earth and the ITO did not exclude for depreciation the value of reservoirs, salt pans and piers and condensers and channels made of earth but allowed the depreciation claim of the assessee on the entire value of the reservoirs, salt pans and piers and condensers and channels at 6 per cent even though these were only partly constructed of masonry and partly made of earth, When the ITO initiated reassessment proceedings under section 147(a) the assessee contended that there was no failure on its part to disclose all material facts, and that at any rate the ITO could have probed further and found…

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