A. Raghuvir, C.J.
1. The following question has been referred to this court under Sub-section (1) of Section 256 of the Income-tax Act, 1961. The question reads as under :
'Whether, on the facts and in the circumstances of the case, it could be inferred that the assessee was carrying on business through the agency of the vendor and, therefore, the income from Dekhari Tea Estate accrued to the assessee during the previous year relevant to the assessment year 1970-71 ?'
2. The assessee is Khanikar Tea Estate (P.) Ltd. On April 16, 1970, the assessee purchased a tea estate from Dekhari Tea Co. Ltd. a company incorporated in England with its registered office at 15, St. Helen's Place, Bishopsgate, London. The tea estate consisted of land of 1,858.85 acres of plantations, garden nursery, tea bushes, seedlings, standing tea crops, etc. The contract of sale was entered into on June 26, 1969, and under that contract, the assessee agreed to purchase the estate as a going concern from January 1, 1969. The sale price of Rs. 25,00,000 was to be paid in instalments of Rs. 10,00,000 as earnest money and a guarantee was offered to the vendor for the balance of Rs. 12,50,000. Payments of Rs. 4,00,000 (40%), Rs. 10,00,000 (25%), i.e., Rs. 6,25,000 and 25% of that amount was again to be paid on specified agreed dates. Interest was paid from the date of delivery of the tea estate with yearly rests. The sale deed was executed on April 16, 1970, and registered. The deed recited 'the vendor doth hereby convey, grant, sell, transfer, assign and assure unto the purchaser with effect from the 1st day of January, 1969, all those the several pieces or parcel of land, etc.'
3. The above question arose as respects the assessment year 1970-71. Before the Income-tax Officer and the Appellate Assistant Commissioner a dispute arose as to the date when the sale became effective. Whether the assessee is accountable for the profits from January 1, 1969, and whether the assessee is entitled to deduction of expenditure incurred. A question also arose as to whether the vendor was the agent of the vendee while he managed the tea estate from January, 1969. These questions were determined by the Appellate Tribunal. The assessee's contention that the vendor was not the agent of the assessee and that the assessee was not accountable for profits accrued from January 1, 1969, was not accepted. The Tribunal held that the vendor of the tea estate during the relevant period was the agent of the assessee. The assessee was accountable for the profits obtained from January 1, 1969, and is entitled to the deductions under the Act. Thereafter, the above question has been referred to this court.
4. It is, in this regard, apposite to refer to the Indian Registration Act and in particular to Section 47 of the Registration Act which reads as under :
'47. A registered document shall operate from the time from which it would have commenced to operate if no registration thereof had been required or made, and not from the time of its registration.'
5. In the context of the above provision, as of fact, it was held by the Revenue authorities that the sale became effective only from January 1, 1969. We are aware that, in certain circumstances, inferences from facts may gain the characteristic of a question of law but in this case, the asses-see does not argue that the finding recorded by the Tribunal is incorrect. All that is argued on behalf of the assessee in the instant case is that the assessee is entitled to the depreciation under Section 32 of the Income-tax Act, 1961. That aspect is implied in the question referred. But that aspect is not brought out in clear terms in the question referred to the court. Therefore, the assessee suggested that the question may be reframed as under :
'Whether, on the facts and in the circumstances of the case, the income from the Dekhari Tea Estate was assessable in the hands of the assessee for the assessment year 1970-1971 as per terms of the agreement dated June 26, 1969, followed by the sale deed dated April 16, 1970, and, if so, whether the assessee was entitled to depreciation under Section 32 of the Act in computing the said income ?'
7. Learned counsel for the Revenue, however, urged that the above question as suggested by the assessee covered aspects not referred to this court. It was secondly urged that, before the Appellate Tribunal, the assessee did not contend about the depreciation under Section 32 of the Act. Therefore, this court should not reframe the question as suggested by the assessee.
8. As to the powers of this court to reframe a question, the question is not res Integra. See : [1979]116ITR897(Patna) at page 904 (Pat) (Addl. CIT v. Dongarsidas Biharilal) and : [1985]152ITR261(Patna) (Jamunadas Mannalal v. CIT ), wherein it is held : 'It is an accepted principle of law that where the question referred for opinion did not cover the real controversy in issue, the High Court could reframe the question and decide the real controversy.'
9. Here, in the instant case, the controversy was whether the sale was effective from January 1, 1969, or whether it was effective from April 16, 1970. As a question of fact, the controversy was settled stating that it is effective from January 1, 1969. If it is accepted that the sale is effective only from January 1, 1969, the business from that date was carried on by the vendor as agent of the vendee-assessee. As a corollary of that fact, under Section 32 of the Act, the assessee is entitled to depreciation.
10. In the question referred, especially from the words 'the income from Dekhari Tea Estate accrued to the assessee during the previous year relevant to the assessment year 1970-71', the depreciation is relevant and does arise in the facts of the case.
11. We have, in our mind, a passage attributed to Lord Asquith of the House of Lords in [1951] 2 All ER 587; [1952] AC 109 (East End Dwelling Co. Ltd. v. Finsbury Borough Council), wherein the Law Lord had stated :
'If you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so, also imagine as real the consequences and incidents which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it. One of these in this case is emancipation from the 1939 level of rents. The statute says that you must imagine a certain state of affairs. It does not say that, having done so, you must cause or permit your imagination to boggle when it comes to the inevitable corollaries of that state of affairs.'
12. We have earlier stated that the first part of the question is not argued in this court, that is, that the sale deed is effective from January 1, 1969, is not disputed. Whether the assessee is entitled to depreciation under Section 32 of the Act is argued. That part we hold in favour of the assessee.
13. In that view, we answer the second part of the reframed question in the affirmative, in favour of the assessee and against the Revenue. No costs.