Delhi High Court
Commissioner Of Income Tax vs V.M. Chawla on 12 April, 1988
Author: L Seth
Bench: A Saharye, L Seth
ORDER
Leila Seth, J.
1. This application under s. 256(2) of the IT Act, 1961 by the CIT is for a direction to the Income-tax Appellate Tribunal to state a case and refer the question of law for decision of this Court.
2. The brief facts are, that Lal Devi's husband purchased 116, Golfs Link, New Delhi. On his death and by his Will his widow Lal Devi was given a life interest in the said property.
The relevant assessment year is 1980-81. The assessed claimed that the income from the above mentioned property should be assessed under the head "income from house property". But the ITO assessed the said income under the head "income from other source", as he held that she was not the owner, having only a life interest.
The assessed appealed to the AAC and relied on a decision of the decision of the Special Bench of the Income-tax Appellate Tribunal in the case of ITO vs. J. L. Sawhney (1982) 2 ITD 207 (Del) (SB). The AAC relying on the above mentioned decision accepted the appeal and directed the ITO "to treat the rental income as 'income from house property' and allow deduction under s. 24 for repairs."
The Revenue filed an appeal before the Income-tax Appellate Tribunal. The Tribunal by its order dt. 31st January, 1985 confirmed the order of the AAC and dismissed the appeal observing that since the AAC had followed the order of the Special Bench of the Income-tax Appellate Tribunal in the case of J. L. Sawhney they would not be justified in taking a contrary view.
The Revenue then moved an application under s. 256(1) of the IT Act, 1961. The Tribunal rejected the application on the ground that as no reference had been asked for by the Revenue in the earlier years on the facts it could not "be said to be aggrieved by the order". The application was consequently dismissed in order to "maintain consistency and conformity".
3. It is well settled that each assessment year is separate and independent and even if the Revenue does not challenge the decision of the Tribunal in an earlier year, it does not preclude it from doing so later.
It has also been brought to our notice that the order of the Special Bench of the Tribunal in J. L. Sawhney's case is itself the subject matter of a reference. This reference, being I.T.R. 533/83, is pending in this Court.
4. In view of the fact that the assessed has relied on the Special Bench decision of the Tribunal in J. L. Sawhney's case and in this case the AAC and Tribunal based their decision on J. L. Sawhney's case, we are of the opinion that a reference should be called for in this case also.
5. Consequently, we direct the Income-tax Appellate Tribunal to state a case and refer the following question of law for the opinion of this Court :
"Whether on the facts and in the circumstances of the case, the Tribunal is correct is law in holding that income from property situated at 116, Golfs Link, New Delhi was assessable as income from house property and not income from other sources ?"
6. In the result, the application is allowed but we make no order as to costs.
