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Issues involved: Application u/s 256(2) of the Income Tax Act, 1961 for direction to the Income-tax Appellate Tribunal to state a case and refer a question of law to the High Court.
Summary: The case involved an application u/s 256(2) of the Income Tax Act, 1961, where the Commissioner of Income-tax sought a direction for the Income-tax Appellate Tribunal to refer a question of law to the High Court. The dispute arose regarding the assessment of income from a property in New Delhi under the head "Income from house property" or "Income from other sources". The deceased husband of Lal Devi had purchased a property in Golf Links, New Delhi, and through his will, Lal Devi was given life interest in the property. The Income-tax Officer assessed the income from the property under "Income from other sources" due to Lal Devi's life interest, contrary to the assessee's claim of it falling under "Income from house property". Upon appeal, the Appellate Assistant Commissioner directed the Income-tax Officer to treat the rental income as 'income from house property' based on a decision of the Special Bench of the Income-tax Appellate Tribunal in a similar case. The Revenue then appealed to the Income-tax Appellate Tribunal, which upheld the decision of the Appellate Assistant Commissioner, citing consistency with the Special Bench decision. Subsequently, the Revenue sought a reference under section 256(1) of the Income-tax Act, 1961, which was rejected by the Tribunal to maintain consistency with previous decisions. The High Court emphasized that each assessment year is independent, and the Revenue can challenge decisions in later years even if not done in earlier years. Given the reliance on the Special Bench decision in the case, the High Court directed the Income-tax Appellate Tribunal to refer the question of law to the court regarding the correct classification of income from the property in New Delhi. The court allowed the application, with no order as to costs.
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