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To understand rival contentions we may briefly advert to the facts of the case.

The assessment year is 1971-72, the accounting year being 1970-71. The assessee, a limited company, was possessed of considerable properties at Calicut and Mangalore. It owned these properties right from 1920 onwards. The assessee had been allowed in the previous year. During the period relevant to the assessment year 1971-72 the assesee sold some of these properties on which it had already claimed depreciation. The Calicut Weaving Factory was sold for Rs. 20,000/-, its original value being Rs. 10,000/-. The assessee has incurred an additional expenditure of Rs. 979/- on this property. As noted above depreciation has been allowed on the value of the property in the earlier years. In computing the capital gains the assessee showed a capital loss of Rs. 78/- on the sale of this property. This the assessee did on revaluing the property as on January 1, 1954. The assessee sold its Mangalore building for Rs. 2,25,000/-. Its original cost as adjusted came to Rs. 76,680/-. IN respect of these buildings also depreciation has been claimed and allowed in the previous years. Here again the assessee revalued the building as on January 1, 1954 and on that basis showed the capital gains at Rs. 44, 713/-. The stand taken by the assessee was that it had the option under Section 55(2) (i) of the Act either to adopt the written down value of the building or the value of the building as on January 1, 1954 and it has chosen the latter. the Income Tax Officer, however, took the view that the assessee did not have the right to substitute the value as on January 1, 1954 because the assets were depreciable assets to which Section 50(1) applied which was a special provision in respect of depreciable assets and the provision as contained in Section 55(2)(i) allowing option which was general provision was not applicable in the case of depreciable assets. The Income Tax Officer, therefore, substituted the original value an arrived at a capital gain of Rs. 9021/- in the case of Calicut property and Rs. 1,46,320/- in the case of Mangalore buildings. On appeal filed by the assessee the Appellate Assistant Commissioner agreed with the Income Tax Officer. He was also of the view that the assessee did not have the right to substitute value as on January 1, 1954 in respect of depreciable assets. The assessee then went to the Income Tax Appellate Tribunal and the Appellate Tribunal dismissed the appeal but at the instance of the assessee referred the aforesaid second question for the decision of the High Court. The High Court agreed with the view of the Appellate Tribunal and decided the question in affirmative, in favour of the revenue and against the assessee. On certificate granted by the High Court under Section 261 of the Act this appeal has come before us.