COMMISSIONER OF INCOME TAX Vs. ADMIRALTY FLATS MOTEL

JUDGEMENT

(1.) IN this reference under s. 256(1) of the I.T. Act, 1961, the following two questions have been referred

(2.) THERE was an HUF consisting of P. V. Gajapathi Raju, his wife, Radha, and his two daughters, Vidya and Urmila. P. V. Gajapathi Raju was the karta of this family. In the partition of a larger HUF, of which Gajapathi Raju was a coparcener, he obtained certain properties, movable and immovable, as and for his share. These properties belong to the HUF of which Gajapathi Raju was the karta

(3.) THE department filed appeals before the Tribunal and the Tribunal went into the question whether the gifts were valid or not and came to the conclusion that the gifts were valid as Gajapathi Raju was the sole surviving member of the coparcenary, who had an absolute power of alienation over the properties belonging to him. It was, therefore, held that the income was not assessable in the hands of the family. Thereafter, it went into the question as to under what heads the income from those properties was liable to be assessed, in the hands of the firm. As far as the buildings were concerned, the Tribunal took the view that the income therefrom was assessable under the head "Property". With reference to the furniture and other items let out to the tenants in the said properties, the Tribunal's view was that the income was assessable under the head "Business" The result was that the firm was granted registration and it was 'directed to be assessed with reference to the income from "property and" business" in the manner mentioned aboveThe revenue, aggrieved by this order of the Tribunal, has brought up the matter on reference with reference to the two questions extracted already