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Commissioner of Income-tax Vs. Gambhir Mal Pandya - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtRajasthan High Court
Decided On
Case NumberD.B.I.T. Case No. 351 of 1980
Judge
Reported in[1986]160ITR903(Raj)
ActsIncome Tax Act, 1961 - Sections 28 and 256(2)
AppellantCommissioner of Income-tax
RespondentGambhir Mal Pandya
Appellant Advocate R.N. Surolia, Adv.
Respondent Advocate V.K. Singhal, Adv.
Excerpt:
.....by rule 12 of juvenile justice rule, 2007 - as such, accused has to be treated as juvenile under the said act. - in our view, on the basis of admitted facts, a question of law does arise out of the order of the tribunal, dated february 15, 1979. however, the question which is sought to be referred does not bring out clearly the matter in dispute......income-tax act '2. the facts of this case are not in dispute. the income in question represents lease income from a factory belonging to the assessee. the question which arose before the income-tax officer, company circle-i, jaipur, during the assessment proceedings relating to the assessment year 1977-78, was as to whether the income of the assessee from leasing the factory was income from business or income from other sources. the income-tax officer was of the view that such income of the assessee could not be held to be income from business, but it was income from other sources and was taxable as such.3. on appeal, the appellate assistant commissioner of income-tax, a-range, jaipur, set aside the order passed by the income-tax officer and held that the income from lease money.....
Judgment:

Dwarka Prasad, J.

1. By this application under Section 256(2) of the Income-tax Act, 1961, the Commissioner of Income-tax, Rajasthan, desires us to call upon the Income-tax Appellate Tribunal, Jaipur Bench, Jaipur, to refer the following question of law arising out of the order of the Appellate Tribunal, dated February 15, 1979, to this court for its opinion :

' Whether, under the facts and circumstances of the case, the Tribunal was justified in holding that the income of the assessee is assessable under Section 28 of the Income-tax Act '

2. The facts of this case are not in dispute. The income in question represents lease income from a factory belonging to the assessee. The question which arose before the Income-tax Officer, Company Circle-I, Jaipur, during the assessment proceedings relating to the assessment year 1977-78, was as to whether the income of the assessee from leasing the factory was income from business or income from other sources. The Income-tax Officer was of the view that such income of the assessee could not be held to be income from business, but it was income from other sources and was taxable as such.

3. On appeal, the Appellate Assistant Commissioner of Income-tax, A-Range, Jaipur, set aside the order passed by the Income-tax Officer and held that the income from lease money should be recomputed under the head ' Business income ' and the expenses claimed by the assessee should be allowed as incidental to business. No reasons were assigned by the Appellate Assistant Commissioner but he followed his earlier decision in respect of the assessment years 1973-74, 1974-75, 1975-76 and 1976-77.

4. The Income-tax Appellate Tribunal by its order dated February 15, 1979, upheld the order passed by the Appellate Assistant Commissioner of Income-tax and also followed its decision in respect of the earlier years, in holding that the income from lease money was income from business and the assessee was entitled to deduction of expenditure incurred in earning such income, The Income-tax Appellate Tribunal declined to refer the question arising out of its order dated February 15, 1979, to this court on the alleged ground that the finding of the Tribunal was essentially a finding of fact and no question of law arose out of the order of the Appellate Tribunal.

5. In this matter, it is not disputed before us that a question of law arises out of the order of the Appellate Tribunal dated February 15, 1979, relating to the nature of the income of the assessee from lease money, as to whether it was income from business or it was income from other sources. The question as to whether the expenses claimed by the assessee could or could not be allowed as incidental to the business or as incurred in earning such income, depends entirely on the question as to whether the income from the lease money is held to be income from business or otherwise.

6. We disagree with the finding of the Tribunal as to whether the income from lease money is income from business or not is a question of fact. In our view, on the basis of admitted facts, a question of law does arise out of the order of the Tribunal, dated February 15, 1979. However, the question which is sought to be referred does not bring out clearly the matter in dispute. As such, we reframe the question as under in order to clarify its ambit:

' Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the income of the assessee from lease money was assessable under Section 28 of the Income-tax Act '

7. We direct the Income-tax Appellate Tribunal to state the case and refer the aforesaid question of law arising out of its order dated February 15, 1979, for the opinion of this court.

8. Parties are directed to bear their own costs.


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