COMMISSIONER OF INCOME TAX Vs. PALANIAPPA ENTERPRISES

JUDGEMENT

(1.) AT the instance of the Revenue, the Appellate Tribunal under section 256(1) of the Income-tax Act, 1961, has referred the following common question of law for the assessment years 1976-77 to 1978-79 for the opinion of this court;

(2.) THE assessee-firm is the owner of the property called "Kannammai Building", Madras. THE Income-tax Officer for the assessment years 1976-77 to 1978-79 included the rental income arising from the property known as "Kannammai Building" in the hands of the assessee. THE assessee claimed that the property owned by it was transferred to the individual partners by an agreement dated January 12, 1973, and hence the income of the property should be assessed in the hands of the respective individuals. THE Income-tax Officer rejected the claim of the assessee and included the income in the assessee's hands. THE Commissioner of Income-tax (Appeals) on appeal by the assessee held that the action of the Income-tax Officer was justified. THE assessee preferred a further appeal before the Appellate Tribunal and the Appellate Tribunal, following the earlier case in the assessee's own case in ITA No. 1673 (MDS)/1976-77 doted September 30, 1977, for assessment year 1973-74, held that there was a valid transfer and the income from the property known as "Kannammai Building" cannot be included in the hands of the assessee. THE order of the Appellate Tribunal is the subject-matter of this tax case.