JUDGMENT : Rajendra Nath Mittal, J. – The IT Appellate Tribunal has referred the following question u/s 256(1) of the IT Act, 1961 for opinion of the court :
“Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the transaction of purchase and sale in question was a finding in the nature of a trade and surplus of Rs. 15,139 was assessable to tax as the assessees income ?”
2. The case has a chequered history and it is not necessary to give the facts. The question relates to the profit derived from the purchase and sale of some land. The ITO was of the opinion that the transaction purchase sale of the land by the assessee amounted to an adventure in the nature of trade. Consequently, he added the income of profit from the said transaction to the total income of the assessee as business income. The assessee went up in appeal before the AAC who affirmed order of the ITO and dismissed the same. Against that judgment, he went up in appeal before the Tribunal. In the appeal, a difference of opinion arose between the Accountant Member and the Judicial Member. The Accountant Member came to the conclusion that the income was agricultural income and this was not liable to tax. He did not advert to this aspect of the matter. The judicial Member was of the opinion that the transaction was an adventure in the nature of trade, that the income was not agricultural income and therefore, it was liable to tax on both counts. As there was difference if opinion between the two members, the matter was referred to the third member. He affirmed the view of the Judicial Members that it was not an agricultural income. He, however, did not give any finding regarding the matter as to whether the transaction was an adventure in the nature of trade. In view if the opinion dismissed the appeal vide its order dt. 29-8-1975. On an application by the mentioned question was referreed for the opinion of this Court.
3. It is urged by Mr. Gupta, ld. counsel for the petitioner, that no opinion has been given by the Tribunal on the question as to whether the transaction was an adventure in the nature of trade and in spite of that the question includes that aspect. He submits that the question as framed could not be referred, as a reference can be made regarding a matter or which a finding has been recorded by the Tribunal. Mr. Ashok Bhan, ld. counsel for the respondent, has fairly admitted that no finding has been recorded by the Tribunal on this aspect of the matter and that it was the duty of the Tribunal to record a finding thereon before referring it to this u/s 256(1). In the circumstances, the Tribunal is required to record a finding on this aspect if the matter in the appeal. The second part of the question is inextricably mixed up with the decision of first part of the question and, therefore, it cannot be answered at this stage. Consequently we direct the Tribunal to re-hear the appeal and dispose it off in accordance with law. It has been agreed between the ld. counsel that the parties will be entitled to urge all the contentions before the Tribunal. The parties are directed to appear before the Tribunal on 7-2-1984.