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Issues:
1. Interpretation of section 64(1)(ii) of the Income-tax Act, 1961 regarding the inclusion of share income of minor sons in the assessment of the assessee. 2. Validity of the reference made to the High Court of Madras instead of the jurisdictional High Court of Andhra Pradesh. 3. Obligation of the Tribunal to pass orders in conformity with the judgment of the High Court under section 260(1). 4. Consideration of consent in conferring jurisdiction on the High Court to answer the reference. Analysis: Issue 1: The case involved the interpretation of section 64(1)(ii) of the Income-tax Act, 1961 regarding the inclusion of share income of minor sons in the assessment of the assessee. The Tribunal initially ruled in favor of the assessee based on the decision of the Andhra Pradesh High Court. However, the High Court of Madras later disagreed with this interpretation in a separate judgment, leading to a reference of the matter back to the Tribunal. Issue 2: The validity of the reference made to the High Court of Madras was challenged by the assessee, arguing that the assessment was completed in Hyderabad, and thus, the reference should have been made to the jurisdictional High Court of Andhra Pradesh. The counsel cited previous judgments to support the contention that the reference should align with the location of the Income-tax Officer. However, the Tribunal held that the reference to the Madras High Court was made with the knowledge of the assessee and no objections were raised during the process, thus rejecting the challenge. Issue 3: Under section 260(1), the Tribunal is obligated to pass orders in conformity with the judgment of the High Court. The Tribunal's powers are limited, and it must act in accordance with the High Court's decision. The Tribunal cited previous judgments emphasizing the duty to follow the High Court's order, stating that the Tribunal must modify its order based on the High Court's decision. Issue 4: The consideration of consent in conferring jurisdiction on the High Court was also discussed. The Tribunal rejected the argument that consent could not confer jurisdiction on the Madras High Court, stating that both parties had agreed to the reference during the case finalization. The Tribunal held that the parties had waived the benefit given under section 256(1) and that the consent was valid, citing relevant case law to support this conclusion. In conclusion, the Tribunal reversed its initial decision in light of the High Court's judgment, ruling in favor of the Revenue and allowing their appeal. The Tribunal emphasized the obligation to follow the High Court's decision under section 260(1) and rejected challenges to the validity of the reference made to the High Court of Madras.
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