1. ' DR. B.P. SARAF, J.---By this reference under section 256(1) of the Income Tax Act, 1961, the Income Tax Appellate Tribunal has referred the following question of law at the instance of the Revenue to this Court for opinion: "(1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee-company did not hold a lease of a building for the reason that it held a lease of terrace of a building?
(2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the case of the assessee-company was covered by section 32(1)(iii) of the Income Tax Act, 1961?"
2. ' The controversy in this case related to the entitlement of the assessee to the balancing allowance of Rs,57,134 in terms of section 32(1)(iii) in respect of the first floor property which was constructed by the assessee on a leased terrace at the cost of Rs,1,04,012 which was discarded during the year under consideration.
3. ' The answer to the above controversy depends on whether the provisions of section 32(1) were applicable to the property in question. The Tribunal found that the property, namely, the building in question was owned by the assessee. It was observed by the Tribunal that the Revenue itself has allowed depreciation of Rs,46,878 in terms of section 32(1)(ii) in relation to the same property on the basis that it was owned by the assessee. In that view of the matter, the Tribunal held that the claim for the balancing allowance, i,e,, cost minus depreciation allowed in respect of the said property in terms of section 32(1)(iii), was merely consequential and flowed from the Revenue's own view as to the ownership of the property which was discarded. It was further observed that there is no room for any dispute. It is anomalous on the part of the Revenue to take the stand that while the property discarded was owned by the assessee for the purpose of clause (ii) of subsection (1) of section 32, the same property was not owned by the assessee for the purpose of clause (iii) of subsection (1) of section 32.
4. ' In view of the above finding, we find that no controversy, as such, arises in this case. The Tribunal was justified in holding that the assessee was entitled to the balancing allowance under section 32(1)(iii) of the Income Tax Act, 1961. We, therefore, answer question No,2 in the affirmative and in favour of the assessee.
5. ' Question No,1, in our opinion, in view of the facts and circumstances of case, has become academic and we need not answer it. We, therefore, decline to answer the same.
6. ' This reference is disposed of accordingly. No order as to costs.