SALIGRAM AND CO Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS reference is made at the instance of a partnership firm run in the name and style of Saligram and Co. at Dibrugarh. The subject -matter of the reference is a two -storeyed house at Mancotta Road of Dibrugarh town purchased by the firm in 1968 for business purposes. The house property of the firm is in two floors and measures in each floor 3,388 square feet. The first floor is occupied by two partners of the firm for residential purposes. The second floor is let out to two sister concerns, Saligram Premsukh & Co. and Saligram & Co. (P) Ltd., who paid a rent of Rs. 6,000.

(2.) THE ITO, in the assessment order for 1973 -74, added Rs. 12,000 rent as regards the first floor and Rs. 6,000 for the second floor as income of the firm. The firm disputed the amount of Rs. 12,000 but did not dispute the rent of Rs. 6,000. The AAC, on appeal, confirmed the order of the ITO. On further appeal, the Tribunal remitted the subject -matter for recomputation of rent of the first floor. This order of the Tribunal we will refer to as the first order of the Tribunal. After remand, the ITO added Rs. 18,000 as rent derivable from the first floor. The AAC, barring minor details as to deduction of municipal taxes and land revenue, confirmed that order. On further appeal, the Tribunal dismissed the appeal. This order we will call as the second order of the Tribunal.

(3.) THE answer to the question referred is to be found in S. 22 of the IT Act which reads as under :