COMMISSIONER OF INCOME TAX Vs. BABU KHAN BUILDERS

JUDGEMENT

(1.) THIS reference arising under Section 256(1) and (2) of the Income Tax Act, 1961 raises the question as to "whether on the facts and circumstances of the case, the Income Tax Appellate Tribunal is correct in holding that the annual value of the property, of which the assessee was the legal owner, cannot be assessed in the hands of the assessee under Section 22 of the Income Tax Act -

(2.) HEARD both sides.

(3.) THE assessee firm has filed its return of income on 28.9.1988, declaring a loss of Rs. 1,272/ -. The firm was engaged in real estate business and during the period from 1979 to 1984 it has constructed a commercial complex known as 'AL KARIM TRADE CENTRE' at M.G. Road, Ranigunj, Secunderabad and has sold the flats/shops/floor spaces etc. In response to the notices of hearing issued under Section 143(2) and 142(1) of the Income Tax Act, the counsel appeared and filed details called for from time to time. Mr. Syed Ghousuddin, who is supposed to be assisting the assessee firm, and its auditor in their accounts, was present during the course of hearings. The managing partner of the firm, Sri Ghiasuddin Babukhan on oath stated that Mr. Syed Ghousuddin has prepared the profit and loss account and balance sheet of the relevant previous year, Mr. Ghousuddin also gave statement on oath. Copies of these statements were made available to the assessee firm. There was a search and seizure operations under Sections 132 of the Income Tax Act (for short the Act), in the case of the assessee firm, and its partners. The seized books of accounts were examined and the assessee was allowed to take extracts of the seized papers, which would find mention later in this order. After examining the evidence and details furnished and evidence produced, and after giving due opportunity to the assessee firm of being heard, the assessment was completed.