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PETITIONER: BROOKE BOND & COMPANY LTD.(NOW KNOWN ASBROOKE BOND LEIBIG LI

       Vs.

RESPONDENT: C.I.T., WEST BENGAL-II, CALCUTTA

DATE OF JUDGMENT30/09/1986

BENCH: PATHAK, R.S. BENCH: PATHAK, R.S. MUKHARJI, SABYASACHI (J)

CITATION:  1986 SCR  (3) 980        1986 SCC  (4) 689  JT 1986   613            1986 SCALE  (2)573

ACT:      Indian Income  Tax Act,  1922-Sections 6,  24(2) & 33A- Assessee-Dividend income  shown in return under head ’income from other  sources’ -  Whether could be computed under head ’income from business’.

HEADNOTE:      The appellant,  a sterling company carrying on business in tea  with its Head office in the United Kingdom, invested in the  shares of  other tea companies in different parts of the world,  and had  a hundred  per cent share holding in an Indian subsidiary.      The appellant  was assessed under the Indian Income Tax Act 1922.  For the assessment year 1955-56 the appellant was assessed  on   its  total  world  income  on  the  basis  of provisional  figures   of  its   business   loss   including depreciation, and its income from individuals. As its Indian income exceeded  its income outside India it was assessed as a  resident.   Meanwhile  the  appellant  had  already  been assessed for  the subsequent  assessment year 1956-57 in the status of a ’non-resident’ and its income from dividends was assessed under  the head  ’Income from  other Sources’.  The loss determined for the assessment year 1955-56 could not be carried forward  and set  off against  the  income  for  the assessment year  1956-57, as  the latter assessment was made subsequent to the farmer.      The appellant  preferred two revision applications, one each for the assessment years 1955-56 and 1956-57 under sub- s. (2)  of s.  33A. In  the  revision  application  for  the assessment year  1955-56, the  appellant  claimed  that  the quantum of  loss determined  for that year having been based on provisional  figures should  be revised  on the  basis of final figures  certified by  an Inspector  of Taxes  in  the United Kingdom,  that the loss should be ascertained for the purpose of  carrying it forward, and that the loss should be bifurcated between an unabsorbed deprecia- 981 tion and  other loss.  In the  revision application  for the assessment year  1956-57, the appellant claimed a set off of the loss  determined for the assessment year 1955-56 against the income of the assessment year 1956-57 on the ground that the shares held by it in different companies constituted its

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trading assets  and the  dividend income  accruing therefrom should be  regarded as income from accruing therefrom should be regarded as income from business.      During the  pendency of  these revision  petitions  the assessment for  the assessment year 1957-58 was completed as a non-resident,  and the income was determined as receipt by way of dividends on its share holdings.      In the  appeal to the Appellate Assistant Commissioner, it was claimed that the loss for the assessment year 1955-56 should be  carried forward and set off against the income of the assessment  year 1957-58  under  sub-s.  (2)  of  s.  24 because both  the losses  and the income arose from business carried on  by the  appellant, but  the appeal was dismissed holding that  there would  be no  loss if  the loss  for the assessment year  1955-56 was  set off against the income for the assessment  year 1956-57  and that the loss could not be legally set off directly in the assessment year 1957-58.      In further  appeal, the  Income-Tax Appellate  Tribunal set aside  the order of the Appellate Assistant Commissioner and directed  it to  dispose  of  the  appeal  afresh  after determining whether  the appellant was entitled to set off a business loss  arising outside  the taxable  territories for the assessment  year 1955-56  against  the  dividend  income arising in  the taxable  territories for the assessment year 1957-58. The reference to the High Court was declined by the Appellate Tribunal.      The revision  application pertaining  to the assessment year 1955-56 was allowed subject to the claim being verified in regard  to the figures and calculation of depreciation by the Income  Tax Officer. The revision application pertaining to  the  assessment  year  1956-57,  however,  was  rejected holding that  the dividends earned by the appellant from the investments in  shares of  companies  carrying  on  the  tea business could  not be  said to be a part of the appellant’s business because  the investments were not incidental to the appellant’s business activities and were not held as trading assets, that  the companies  from  which  the  dividend  was earned  were  not  companies  of  which  the  appellant  was managing agent,  that a  set off  cannot be  allowed to  the extent of the 982 unabsorbed depreciation  brought forward from the assessment year 1955-56  against the business income derived during the assessment year  1956-57, and  that there  was  no  business income in the assessment year 1956-57.      A Petition  under  Art.  226  filed  by  the  appellant against the  disposal of  his revision  application for  the assessment year 1956-57 was dismissed by a Single Judge, and the appeal against that order as well as dismissed.      In the  appeal to this Court on behalf of the appellant it was  contended: (1) that if this Court clarified that the Appellate Assistant  Commissioner can  proceed in the appeal relating to  the assessment  year 1957-58 pending before him without  being   influenced  by   the  observations  of  the Commissioner of  Income Tax  and the  High Court in the case relating to  the assessment  year 1956-57  on the  aspect of carry forward  of loss under sub-s. (2) of s. 24, the appeal would not  be pursued, and that if such clarification is not possible then  this Court  should confine itself to the case relating to  the  assessment  year  1956-57;  (2)  that  the Commissioner of  Income  Tax  had  conceded  in  an  earlier proceeding  that   the  dividend   income  was  income  from business; (3)  that the loss should be carried forward under sub-s. (2) of s. 24 from the assessment year 1955-56, to the assessment year  1956-57 and  it is  not necessary  that the

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business carried on in the assessment year 1956-57 should be the same  as that carried on in the assessment year 1955-56, and (4)  that the claim of the appellant to carry forward of unabsorbed depreciation  under sub-s. (2) of s. 10 should be allowed.      Partly allowing the Appeal, ^      HELD: 1.  The order  of the  Division Bench  and of the Single Judge  as well  as the  order of  the Commissioner of Income Tax  on the  revision application  for the assessment year 1956-57  are set  aside in  regard to  the claim of the appellant to  the carry  forward of  unabsorbed depreciation and the  Commissioner is directed to dispose of the revision application afresh. As to the rest of the reliefs the appeal is dismissed. [992C-D]      2. Income-tax is a single charge on the total income of an assessee.  For the  purpose of  computation  the  statute recognises different  classes of  income which it classifies under different heads of income. For each head of income the statute has  provided the  mode of  computing the quantum of such income. The mode of computation varies with 983 the nature  of class  of such  income,  for  the  deductions permissible under the law in computing the income under each head bear  a particular  relevance  to  the  nature  of  the income. [988B-C]      3. The statute operates on the principle that it is the net income  under each  head which should be considered as a component of the total income. The statute permits specified deductions from  the gross  receipt in  order to compute the net income. The net income under the different heads is then pooled together  to constitute the total income. The process of  computation  at  this  stage  takes  in  the  provisions relating to  the carry forward and setting off of losses and of unabsorbed  depreciation. On the conclusion of the entire process of  assessment what emerges is the figure of taxable income, the  quantum of  income which  is assessed  to  tax. [988C-E]      4. Ordinarily  when income  pertains to a certain head, the source  of such  income is peculiar to that head, but it is not  unusual that  commercial considerations may properly describe the  source differently.  For instance,  a  banking concern may  hold securities  in the course of its business. The securities constitute its trading assets and income from them would  in the  commercial sense be regarded as business income. However,  for the  purposes of computation under the income-tax,  the   income  from  such  securities  would  be computed not under the head ’Income from Business’ but under the head ’Interest on Securities’. [988E-G]      5(i) Business income is broken up under different heads only for the purpose of computation of the total income, and that by  such breakup  the income  does not  cease to be the income of the business. [988G]      5(ii) Section  6 of  the Indian  Income Tax  Act  1922, which classified  the taxable  income under  different heads made such classification only for the purpose of computation of the net income of the assessee. [989C]      United Commercial  Bank Ltd.  v. Commissioner of Income Tax, [1957]  32  I.T.R.  688;  Commissioner  of  Income-Tax, Bombay City  v. Chugandas  and Co.,  [1965]  55  I.T.R.  17; Commissioner of  Income-tax,  Andhra  Pradesh  v.  Cocandada Radhaswami Band Ltd., [1965] 57 I.T.R. 306 and O.RM.M.SP.SV. Firm v.  Commissioner  of  Income-tax,  Madras,  [1967]  631 I.T.R. 404, 410 followed.      6. The  mere circumstance that the appellant showed the

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dividend income  under the  head ’Income from other Sources’ in its returns can- 984 not in law decide the nature of the dividend income. It must be determined from the evidence whether having regard to the true  nature  and  character  of  the  income  it  could  be described as  income from business, even though it is liable to fall for computation under another head. [989F-G]      7. In  the instant  case, the appellant placed material before the  Commissioner of  Income-tax showing that it held shares in  companies carrying  on the tea business, and that in India  it enjoyed a hundred per cent share holding in the Indian subsidiary.  But in  order that the share holdings in tea companies  should be  regarded as the business assets of the appellant  there must  be material  evidence  indicating that the  ownership of  the  share-holdings  is  necessarily incidental  to  the  business  of  tea  carried  on  by  the appellant or  that the  share holdings  are held as business assets. [989H; 990A-B]      8. From  the material  placed  before  the  Court,  the Revenue cannot  be said  to have  admitted that the dividend income received  by the appellant from its share holdings in other companies  can be  regarded as part of the appellant’s income from business. [990F-G]      9. The  loss cannot be carried forward under sub-s. (2) of s.  24 from the assessment year 1955-56 to the assessment year 1956-57 because the shares held by the appellant cannot be regarded as its trading assets. [991A-B]

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil  Appeal  No.  2020 (NT) of 1974      From the  Judgment and  Order dated  14.8.1973  of  the Calcutta High Court in Appeal No. 317 of 1970      T.A. Ramachandran, J. Ramamurthi and D.N. Gupta for the Appellant.      C.M. Lodha and Ms. A. Subhashini for the Respondent.      The Judgment of the Court was delivered by      PATHAK, J.  This appeal  by certificate  granted by the High Court of Calcutta is directed against a judgment of the Division Bench  of the  High Court  confirming on appeal the dismissal of the appellant’s writ petition. 985      The appellant, Brooke Bond & Company Ltd., now known as Brooke Bond  Leibig Limited,  is a sterling company carrying on business  in tea  with its  Head  Office  in  the  United Kingdom. The  appellant has  invested in the shares of other tea companies  in different  parts of  the world,  and has a hundred per  cent share  holding in  an  Indian  subsidiary, Brooke Bond (India) Limited.      The appellant  is assessed  under the Indian Income Tax Act, and the relevant financial year is the previous year in relation to  the  corresponding  assessment  year.  For  the assessment year  1955-56 the  appellant was  assessed on its total world  income by  an assessment  order dated  July 16, 1957 on  the basis  of provisional  figures of  its business loss including  depreciation, and its income from dividends. On the basis of those provisional figures it was assessed to a net  loss of  Rs.31,33,647. As  its Indian income exceeded its income  outside India  it was  assessed as  a  resident. Meanwhile, on  March 28, 1957 the appellant had already been assessed for  the subsequent  assessment year 1956-57 in the status of  a non-resident,  and its  income of  Rs.53,11,958

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from dividends  was assessed  under the  head  ’Income  from Other Sources’.  It is  obvious that the loss determined for the assessment year 1955-56 could not be carried forward and set off  against the income for the assessment year 1956-57, as the latter assessment was made subsequent to the former.      On  February  12,  1958  the  appellant  preferred  two revisions applications,  one each  for the  assessment years 1955-56 and  1956-57, before  the Commissioner of Income-tax under sub-s.  (2) of  s. 33A  of the  Indian Income Tax Act, 1922. In  the revision  application for  the assessment year 1955-56 the  appellant claimed  that  the  quantum  of  loss determined for  that year  having been  based on provisional figures should  now be  revised on  the basis  of the  final figures certified  by an  Inspector of  Taxes in  the United Kingdom. The  appellant claimed also that the loss should be ascertained for  the purpose  of carrying  it  forward,  and further that  the  loss  should  be  bifurcated  between  an unabsorbed depreciation  of Rs.40,27,853  and other loss. In the revision application for the assessment year 1956-57 the appellant claimed  a set  off of the loss determined for the assessment year 1955-56 against the income of the assessment year 1956-57 on the ground that the shares held by it in tea companies constituted  its trading  assets and  the dividend income accruing  therefrom should be regarded as income from business. It mentioned that it carried on business in tea in the United  Kingdom and  the investments  were made  in  the usual course of 986 its tea  business in  companies  also  engaged  in  the  tea business  exclusively.   The  revision   petitions  remained pending for eight years.      Meanwhile the appellant’s assessment for the assessment year 1957-58  was completed  in  November  1957  as  a  non- resident, determining  an income of Rs.51,85,836 received by way of  dividends on its share holdings. An appeal was taken to  the  Appellate  Assistant  Commissioner  of  Income  Tax claiming that  the loss  for  the  assessment  year  1955-56 should be carried forward and set off against the income for the assessment  year 1957-58  under  sub-s.  (2)  of  s.  24 because both  the loss  and the  income arose  from business carried on  by the  appellant. By his order dated August 14, 1958 the  Appellant  Assistant  Commissioner  dismissed  the appeal holding  that there  would be no loss if the loss for the assessment  year 1955-56  was set off against the income for the assessment year 1956-57, and that the loss could not be legally  set off directly in the assessment year 1957-58. The appellant  appealed to the Income-tax Appellate Tribunal and on  July 1,  1966 the  Appellate Tribunal  set aside the order of  the Appellate  Assistant Commissioner and directed the Appellate  Assistant  Commissioner  to  dispose  of  the appeal afresh  after determining  whether the  appellant was entitled to  set off  a business  loss arising  outside  the taxable territories  for the assessment year 1955-56 against the dividend  income arising  in the taxable territories for the assessment  year 1957-58. The Commissioner of Income Tax applied for  a reference to the High Court but the Appellate Tribunal rejected the application on December 1, 1966.      On December  5, 1966  the Commissioner  of  Income  Tax disposed  of   the  revision   applications  filed   by  the appellant.  The   revision  application  pertaining  to  the assessment year  1955-56 was  allowed subject  to the  claim being verified  in regard  to the figures and calculation of depreciation  by   the  Income  Tax  Officer.  The  revision application  pertaining  to  the  assessment  year  1956-57, however, was rejected with the observation that the dividend

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earned by  the  appellant  from  investments  in  shares  of companies carrying  on the tea business could not be said to be  a   part  of   the  appellant’s   business  because  the investments were  not incidental to the appellant’s business activities and  were not held as trading assets. It was also stated that the companies from which the dividend was earned were not companies of which the appellant was managing agent so as  to require  the making  of such  investments for  the purposes  of   its  business   as   managing   agents.   The Commissioner also  rejected the  contention of the appellant that a  set off  should be  allowed to  the  extent  of  the unabsorbed depreciation brought forward 987 from the assessment year 1955-56 against the business income derived during the assessment year 1956-57. The Commissioner observed that there was no business income in the assessment year 1956-57.      Thereafter the  appellant filed  a writ petition in the High Court  of Calcutta against the disposal of his revision application  for   the  assessment   year  1956-57,  but  on September 22,  1969 the  learned Single  Judge dismissed the writ  petition.   An  appeal  filed  by  the  appellant  was dismissed by  the Division Bench of the High Court on August 14, 1973.      The Division  Bench adverted  to  the  finding  of  the Commissioner of  Income  Tax  in  the  appellant’s  revision application relating to the assessment year 1956-57 that the material placed  before him  did not  show that the dividend earned by the appellant from its investment in the shares of different  companies  could  be  regarded  as  part  of  the appellant’s  business   income.  He   had  found   that  the investments in shares were not incidental to the appellant’s business activities  and  they  were  not  held  as  trading assets. The  Division Bench held that no error of law in the Commissioner’s order  had been  established and consequently there was no case for interference with the rejection of the appellant’s claim  for carrying  forward the  losses arising from its business in the assessment year 1955-56 against the dividend income  for the  assessment year  1956-57.  On  the other contention raised by the appellant, the claim to carry forward  the   depreciation  allowance   pertaining  to  the business activities  of  the  assessment  year  1955-56  for deduction in  the assessment  proceedings of  the assessment year 1956-57  the Division Bench appeared to be in favour of the appellant,  but it declined to express any final opinion on the  point. The  judgment of  the Division Bench is under appeal before us.      At the  outset learned counsel for the appellant stated before us  that he would not press this appeal if we clarify that the Appellate Assistant Commissioner can proceed in the appeal relating  to  the  assessment  year  1957-58  pending before him  without being  influenced by the observations of the Commissioner  of Income  Tax and  the High  Court in the case relating  to the  assessment year 1956-57 on the aspect of carry forward of loss under sub-s. (2) of s. 24, and that if such  clarification is  not possible  then we  should, in this appeal,  confine ourselves  to the case relating to the assessment year 1956-57.      There was  considerable debate  on the question whether the 988 dividend income  received by  the appellant  from its  share holdings in  different companies engaged in the tea business could be regarded as business income.      It is  a cardinal  principle of  the  law  relating  to

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income-tax that  income-tax is  a single charge on the total income of  an assessee.  For the  purpose of computation the statute recognises  different classes  of  income  which  it classifies under different heads of income. For each head of income the  statute has  provided the  mode of computing the quantum of  such income. The mode of computation varies with the nature  of the  class of such income, for the deductions permissible under the law in computing the income under each head bear  a particular  relevance  to  the  nature  of  the income. The statute operates on the principle that it is the net income  under each  head which should be considered as a component of the total income. The statute permits specified deductions from  the gross  receipt in  order to compute the net income. The net income under the different heads is then pooled together  to constitute the total income. The process of  computation  at  this  stage  takes  in  the  provisions relating to  the carry forward and setting off of losses and of unabsorbed  depreciation. On the conclusion of the entire process of  assessment what emerges is the figure of taxable income, the quantum of income which is assessed to tax.      Ordinarily when  income pertains to a certain head, the source of  such income  is peculiar  to that head, but it is not unusual  that  commercial  considerations  may  properly describe the  source differently.  For instance,  a  banking concern may  hold securities  in the course of its business. The securities constitute its trading assets and income from them would  in the  commercial sense be regarded as business income. However,  for the  purposes of computation under the income-tax law  the income  from such  securities  would  be computed not under the head ’Income from Business’ but under the head ’Interest on Securities’. In United Commercial Bank Ltd., v.  Commissioner of  Income tax, [1957] 32 I.T.R. 688, this Court  pointed out  that business  income was broken up under different heads only for the purpose of computation of the total  income, and  that by such break-up the income did not cease  to be  the income  of the business. The principle was followed  by this  Court in  Commissioner of Income-tax, Bombay City v. Chugandas and Co., [1965] 55 I.T.R. 17 and it was reiterated  that business  income was  broken  up  under different heads  under the  Income  Tax  Act  only  for  the purpose of  computation of  the total  income, and  that  by breaking up the income did not cease to be the income of the business. It was said: 989           "The heads  described in  section  6  and  further           elaborated  for  the  purpose  of  computation  of           income in  sections 7  to 10 and 12, 12A, 12AA and           12B are intended merely to indicate the classes of           income: the  heads  do  not  exhaustively  delimit           sources from which income arises,"      The point  was elaborated  by the Court in Commissioner of Income-tax,  Andhra Pradesh  v. Cocanada  Radhaswami Bank Ltd., [1965]  57 I.T.R. 306, where the Court was called upon to consider  whether the  securities owned  by the  assessee formed part  of the  trading assets  of  his  business,  and income therefrom could be described as income from business, and the  Court reaffirmed that s. 6 of the Indian Income Tax Act  1922,   which  classified   the  taxable  income  under different  heads  made  such  classification  only  for  the purpose of computation of the net income of the assessee and           "though for  the purpose  of  computation  of  the           income,  interest   on  securities  is  separately           classified,  income   by  way   of  interest  from           securities does not cease to be part of the income           from business  if the  securities are  part of the

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         trading assets.  Whether a  particular  income  is           part of  the income  from a  business falls  to be           decided not  on the  basis of  the  provisions  of           section   6    but   on    commercial   principles           ................ If  it  was  the  income  of  the           business, section 24(2) of the Act was immediately           attracted. If  the income  from the securities was           the income  from its  business, the loss could, in           terms of  that section,  be set  off against  that           income."      Accordingly, the  mere circumstance  that the appellant showed the dividend income under the head ’Income from Other Sources’ in  its returns  cannot in law decide the nature of the dividend income. It must be determined from the evidence whether having  regard to  the true  nature and character of the income  it could  be described  as income from business, even though  it is  liable to  fall  for  computation  under another head. The principle was again applied in O.RM.M. SP. SV. Firm  v. Commissioner  of Income-tax,  Madras [1967]  63 I.T.R.   404, 410.  The position on the law is clear. But is the appellant  in the  present case  entitled to  the relief claimed by it?      The appellant  placed material  before the Commissioner of Income-tax  showing that  it  held  shares  in  companies carrying on the tea business 990 and that  in India  it enjoyed  a  hundred  per  cent  share holding in  the Indian  subsidiary. But  in order  that  the share holdings  in tea  commpanies should be regarded as the business assets  of the  appellant there  must  be  material evidence indicating  that the ownership of the shareholdings is necessarily  incidental to the business of tea carried on by the  appellant or  that the  share holdings  are held  as business assets.  The Commissioner  of Income Tax was unable to draw  any conclusion  in favour  of the appellant in this regard, and  the appellant failed to convince the High Court also. We  have given our careful consideration to the matter and except  for the  Indian subsidiary  there is  nothing to show that  the investments of the appellant in the other tea companies were  intended to bring, or in fact brought about, some advantage  or benefit to the business carried on by the appellant. The  mere fact that the share holdings related to the tea companies is not sufficient by itself to support the submission  that   they  were   acquired  to  safeguard  the appellant’s interest  in the  tea business carried on by it. The matter  is pending  in appeal relating to the assessment year 1957-58 before the Appellate Assistant Commissioner and it will  be open  to the appellant to place further material before the Appellate Assistant Commissioner to enable him to come to an adequate and satisfactory decision. The appellant may have  a sufficient case specially in regard to the share holding possessed  by it  in its  Indian subsidiary,  but we refrain from  expressing any  opinion on  the point  and  we leave it to the appellant to satisfy the Appellate Assistant Commissioner that  the  appellants  share  holdings  in  the Indian subsidiary  and the other tea-companies enures to the benefit of the business carried on by it.      An  attempt   was  made  by  learned  counsel  for  the appellant to  show that  the Commissioner  of Income Tax had conceded in  an earlier  proceeding that the dividend income was income  from business. Our attention has been invited to a recital in the order of the Appellate Tribunal relating to the assessment  year 1957-58  and to what has been stated by the Commissioner  in his  reference application against that order. We  are not satisfied from the material placed before

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us that  the Revenue  can be  said to have admitted that the dividend income  received by  the appellant  from its  share holdings in  other companies  can be regarded as part of the appellant’s income from business.      Consequently we  are unable  to sustain the appellant’s challenge to the view expressed by the Division Bench of the High Court  in regard  to the  appellant’s  claim  that  the dividend income must be regarded as income from business. 991      The next point raised by the appellant is that the loss should be carried forward under sub-s. (2) of s. 24 from the assessment year  1955-56 to  the assessment year 1956-57 and it is  not necessary  that the  business carried  on in  the assessment year  1956-57 should  be the same as that carried on in the assessment year 1955-56. This point must also fail because it  proceeds on  the assumption that the shares held by the appellant can be regarded as its trading assets.      The final  contention of  the appellant  relates to the carry forward of unabsorbed depreciation under sub-s. (2) of s. 10.  The Division  Bench appeared  to be of the tentative view that  the appellant  was entitled  to the carry forward claimed by  it, but  it did not express any final opinion as it had  decided to  decline relief  to the  appellant on the ground that  the assessment  for the assessment year 1956-57 had already  been closed  by the Revenue when the assessment for the assessment year 1955-56 was being made and the grant of relief  would have  its consequence on the assessment for the assessment  year 1957-58,  in respect of which an appeal was pending.  The writ  petition was  directed  against  the order of  the Commissioner  of  Income  Tax  made  upon  the revision application  filed by  the appellant  in respect of the assessment  year 1956-57,  and the High Court could have directed the  Commissioner to  grant appropriate  relief for the  assessment  year  1956-57.  The  Commissioner  was  not concerned with  the proceeding  relating to  the  assessment year 1957-58. That was a matter pending in appeal before the Appellate Assistant  Commissioner. The point could have been considered by  the Commissioner  in the revision application for the assessment year 1956-57. Merely because relief given by the Commissioner in that regard in the proceeding for the assessment year  1956-57 could have its consequence upon the proceeding for  the assessment  year 1957-58 then pending in appeal before  the Assistant  Appellate Commissioner,  could not bring  the case  within proviso  (b) to sub-s. (1) of s. 33A of  the Indian  Income Tax  Act. It may be that the same point was  the subject of the appeal, but the point agitated before the Commissioner was with reference to the assessment year 1957-58.  It could  not  debar  the  Commissioner  from considering the  same point  in relation  to the  assessment year 1956-57.  We need  express no  opinion at this stage on the view  tentatively expressed by the Division Bench of the High Court  that the  appellant’s claim to the carry forward of unabsorbed  depreciation from the assessment year 1955-56 to the  assessment year  1956-57 is vaild or not. As we have noted, the  view taken  by the High Court was tentative only and not its final opinion. Indeed, no submission was made on behalf of the Revenue before us on the point. 992 We shall  concern ourselves  merely with  the correctness of the Division Bench refusing to grant relief after it reached the  tentative   finding  that   there  was   merit  in  the appellant’s  claim   to  the  carry  forward  of  unabsorbed depreciation. In  our opinion, the order of the Commissioner disposing of  the revision  application for  the  assessment year 1956-57  should have  been set  aside by  the  Division

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Bench and  the Commissioner  should have  been  directed  to consider the  claim on  its merits.  We make  that direction now. At the same time, we make it clear that it will be open to the  Revenue to  contend on the merits that the appellant is  not   entitled  to   the  carry  forward  of  unabsorbed depreciation.      The appeal  is allowed in so far only that the order of the Division  Bench and  of the learned Single Judge as well as the  order of  the Commissioner  of  Income  Tax  on  the revision application for the assessment year 1956-57 are set aside in  regard to  the claim of the appellant to the carry forward of  unabsorbed depreciation, and the Commissioner is directed to  dispose of  the revision application in respect of that  claim afresh.  As to  the rest  of the  reliefs the appeal is  dismissed. In the circumstances there is no order as to costs. A.P.J.                               Appeal allowed in part. 993