COMMISSIONER OF INCOME TAX Vs. THREE JOINTS INTERNATIONAL

JUDGEMENT

(1.) IN respect of asst. yr. 1986-87, this application has been filed by the Revenue under S. 256(2) of the IT Act, 1961 praying that Tribunal be directed by issue of mandamus to refer for the opinion of this Court the following questions stated to be questions of law:-

(2.) QUESTION Nos. 2 and 3 are not pressed by Mr. Gupta. Regarding question No. 1, Mr. Gupta submits that since the property was let out after additional construction only w.e.f. January, 1986 and the accounting year ends on 31st July, 1985 the Tribunal committed an error in allowing deduction, subject-matter of this question. The learned counsel further submitted that the assessee was not entitled to deduction since loans were utilised for construction of the property which was not owned by the assessee but was owned by one of the directors. In respect of the first submission cl. (3) of the deed of lease shows that Smt. Krishna Rani Chhabra was entitled to enhanced rent of Rs. 3,000 p.m. for the additional construction from the date of the start of the construction and not from the date of the commencement of tenancy. Regarding the other contention of Mr. Gupta we may only notice that after noticing the facts the Tribunal has arrived at a finding of fact that in the process of obtaining loans from the bank and carrying out the construction for and on behalf of the director was, in fact, a business proposition which affected the company to a large extent. It has been found that the company had sublet the premises to German Embassy at a rental of Rs. 25,000 p.m. as against the rental of Rs. 3,000 p.m. paid by it to Smt. Krishna Rani Chhabra, thus substantially benefiting the company. This is a pure finding of fact, which has not challenged as perverse. In any case question proposed is a question of fact. The petition is, accordingly, dismissed.