JUDGMENT A.R. Tiwari, J. 1. At the instance of the assessee, the Tribunal has stated the case and referred the undernoted question of law on Application No. 65/(Ind) of 1989 for the assessment year 1982-83 in connection with the order passed by the Tribunal in I. T. A. No. 773/(Ind) of 1985 : "Whether, on the facts and in the circumstances of the case, the unabsorbed depreciation of the firm for the assessment years 1977-78, 1978-79, 1979-80 and 1980-81 is allowable for set-off against the income of the assessment year 1982-83 ?" The facts lie in a narrow compass. 2. The year of assessment is 1982-83. The assessee has been assessed in the status of a registered firm. Unabsorbed depreciation of the firm relating to the preceding assessment years 1977-78, 1978-79, 1979-80 and 1980-81 was allocated to the partners of the assessee-firm. It was not allowed by the Income-tax Officer as set-off against the income of the preceding year 1981-82. The order of the Income-tax Officer was confirmed by the first appellate authority. In second appeal before the Tribunal, the order was again maintained. The assessee again claimed set-off for the assessment year 1982-83. The assessee did not succeed in getting the set-off right up to the Tribunal. Aggrieved, the assessee filed the aforesaid application under Section 256(1) of the Income-tax Act, 1961. On that application, the Tribunal stated the case and referred the question as noted above. 3. We have heard Shri Puntambekar, learned counsel for the applicant-assessee, and Shri D.D. Vyas, learned counsel for the non-applicant-Department. 4. Shri Puntambekar submitted that the Tribunal committed an error of law in not allowing the set-off as claimed and in confirming the order passed by the Income-tax