COMMISSIONER OF INCOME TAX Vs. CHAWLA M

JUDGEMENT

(1.) THIS application under S. 256(2) of the INCOME TAX ACT, 1961 by the CIT is for a direction to the IT 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 assessee 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 sources", as he held that she was not the owner, having only a life interest. The assessee appealed to the AAC and relied on a decision of the Special Bench of the IT 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 IT Tribunal. The Tribunal by its order dt. 31st Jan.,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 IT 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 INCOME TAX 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 said to be aggrieved by the order". The application was consequently dismissed in order to "maintain consistency and conformity".

(3.) IN view of the fact that the assessee 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.