Law: Income Tax Act, 1961

Section: 260,32,260(1)

Income-tax--Appellate Tribunal---Powers---Reference---Tribunal passing orders to give effect to opinion of High Court---Subsequent decision by Full Bench of High Court in case of another assessee taking a different view---Tribunal has no power to implement decision of Full Bench---Indian Income Tax Act, 1961,S.260. (b) Income-tax--- ----Depreciation---Reference---Cinema theatre---Decision of High Court in case of assessee that cinema theatre is a building for purposes of grant of depreciation---Subsequent Full Bench decision of High Court in case of another assessee that cinema theatre constitutes plant---Tribunal has to grant depreciation in case of assessee treating cinema theatre as a building and not as a plant---Indian Income Tax Act, 1961, Ss.32 & 260. Section 260 of the Income Tax Act, 1961, makes it clear that as soon as a reference is made or answered, the Tribunal has to pass orders in the appeal on the basis of which the reference was disposed of. Thus, it is clear that once a reference application has been decided, the Tribunal has no other go, but to decide that question in accordance with the of the High Court. The assessee cannot say that merely because the Full Bench of the High Court in the case of another assessee has taken another view, the Tribunal should automatically erase the decision in its reference and in its place substitute the of the Full Bench. Further, under the provision of section 260, the High Court as a whole is binding between the parties in a particular case. The assessee was a firm which owned a cinema theatre. For the assessment years 1984-85 and 1985-86, the Assessing Officer allowed depreciation on the theatre building at the rate applicable to building. The contention of the assessee was that the building ought to have been treated as a plant and depreciation should have been given as a plant. The appeal filed by the petitioner was dismissed. On further appeal, the Tribunal held that the theatre building was a plant eligible for depreciation at the rates applicable to a plant. A reference was made by the Revenue which was answered in favour of the Revenue and against the assessee, holding that the building was…

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