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Commissioner of Income-tax Vs. Parsuram Ghanshyam Das and ors. - Court Judgment

LegalCrystal Citation
Subject;Direct Taxation
CourtGuwahati High Court
Decided On
Case NumberCivil Rule No. 96(M) of 1979
Judge
ActsIncome Tax Act, 1961 - Sections 26, 256 and 256(2)
AppellantCommissioner of Income-tax
RespondentParsuram Ghanshyam Das and ors.
Appellant AdvocateB.P. Saraf and U. Baruah, Advs.
Respondent AdvocateNone
Excerpt:
- - it is by now well-settled that an interpretation of a material clause of a material document is a question of law......on the assessee. on appeal to the aac, the finding of the ito was reversed holding that the shares of income of the members of the aop were definite and ascertainable. thereupon, an appeal was filed by the department before the income-tax appellate tribunal, which was rejected. the department then filed an application before the tribunal to refer the above-mentioned questions to this court for its opinion but the tribunal declined to do so. hence, the instant petition.3. it would be seen that the question as to whether the shares in the properties of the members of the aop are definite and ascertainable is a question of fact. hence, the finding reached on that question would be a finding of fact ; but that finding of fact would largely depend on the proper interpretation of the.....
Judgment:

Misra, C.J.

1. This application has been filed by the Commissioner of Income-tax under Section 256 of the I.T. Act, 1961, requiring the Income-tax Appellate Tribunal, Gauhati Bench, Gauhati, to refer the following questions of law to this court for its opinion :

'(i) Whether, on the facts and in the circumstances of the case, the income from house property was not rightly assessed in the hands of the assessee in the status of an ' association of persons ' ?

(ii) Whether, on the facts and in the circumstances of the case, the finding of the Tribunal impliedly relied on and followed in the present case that the shares of the various members of the 'association of persons' in the house property are definite and ascertainable is not vitiated and, therefore, untenable in law having been based on no evidence or on irrelevant consideration as regards the share in the property itself as distinct from share income ?'

2. The assessee-respondent is an 'association of persons' (AOP). The ITO assessed the assessee on the income from house property holding that the shares of each AOP were not definite and ascertainable within the meaning of Section 26 of the Act. He, therefore, levied income-tax on the assessee. On appeal to the AAC, the finding of the ITO was reversed holding that the shares of income of the members of the AOP were definite and ascertainable. Thereupon, an appeal was filed by the Department before the Income-tax Appellate Tribunal, which was rejected. The Department then filed an application before the Tribunal to refer the above-mentioned questions to this court for its opinion but the Tribunal declined to do so. Hence, the instant petition.

3. It would be seen that the question as to whether the shares in the properties of the members of the AOP are definite and ascertainable is a question of fact. Hence, the finding reached on that question would be a finding of fact ; but that finding of fact would largely depend on the proper interpretation of the several clauses of the partnership deed including Clauses 6 and 12 thereof. It is by now well-settled that an interpretation of a material clause of a material document is a question of law. The answer to the question referred to and mentioned hereinabove depended on the construction of the relevant clauses of the deed in question as also Section 26 of the I.T. Act. That being the position, we are of the view that a question of law does arise out of the order of the Tribunal.

4. In the result, we direct the Income-tax Appellate Tribunal to state the facts and refer the first question of law, quoted above, to this court for opinion.

5. The learned counsel for the petitioner did not seriously press for the reference of question No. 2, inasmuch as it is covered by question No. 1.

6. The application is, therefore, allowed. The parties are directed to bear their own costs.


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