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ITR/56/1997 2/ 4 JUDGMENT
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
INCOME
TAX REFERENCE No. 56 of 1997
For
Approval and Signature:
HONOURABLE
MR.JUSTICE D.A.MEHTA Sd/-
HONOURABLE
MR.JUSTICE Z.K.SAIYED Sd/-
===================================================
1
Whether
Reporters of Local Papers may be allowed to see the judgment ?
NO
2
To
be referred to the Reporter or not ?
NO
3
Whether
their Lordships wish to see the fair copy of the judgment ?
NO
4
Whether
this case involves a substantial question of law as to the
interpretation of the constitution of India, 1950 or any order
made thereunder ?
NO
5
Whether
it is to be circulated to the civil judge ?
NO
===================================================
BHARTI
TRUST - Applicant(s)
Versus
COMMISSIONER
OF INCOME-TAX - Respondent(s)
===================================================
Appearance
:
MR NR DIVETIA for Applicant(s) :
1,MR SN DIVATIA for Applicant(s) : 1,
MR MANISH R BHATT for
Respondent(s) :
1,
===================================================
CORAM
:
HONOURABLE
MR.JUSTICE D.A.MEHTA
and
HONOURABLE
MR.JUSTICE Z.K.SAIYED
Date
: 04/03/2008
ORAL
JUDGMENT
(Per
: HONOURABLE MR.JUSTICE D.A.MEHTA)
The
Income-tax Appellate Tribunal, Ahmedabad Bench ?SC?? has referred
the following two questions under Section 256(1) of the Income-tax
Act, 1961 at the instance of the assessee:
Whether,
on the facts and in circumstances of the case, the Tribunal was
justified in law in holding that the assessee trust was liable to
tax at the maximum marginal rate u/s. 161(1A) of the I.T. Act, 1961
?
Whether,
on the facts and in circumstances of the case, the Tribunal was
justified in law in holding that the assessee trust was deriving
?Sprofit and gains of business?? within the meaning of the
provisions of section 161(1A) of the I.T. Act, 1961 ?
For the
reasons that follow hereinafter, the reference is returned
unanswered and hence, bare minimum facts are recorded.
The
Assessing Officer invoked provisions of Section 161(1A) of the Act
for Assessment Years 1985-86 & 1986-87 holding that the
assessee, a private trust, is carrying on business as a partner. The
assessee contended that Section 161(1A) of the Act cannot be invoked
because the assessee has shown partnership share income from the
firm at NIL on the ground that the accounts have not been received
from the partnership. The Assessing Officer has not accepted this
contention by holding that unless and until the Trust ceases to be a
partner or the firm discontinues the business, the entire income of
the Trust has to be taxed as per the maximum marginal rate.
The
assessee, in appeal before the Commissioner (Appeals) contended that
during year under consideration, the firm was closed and hence,
there was no business income earned by the assessee-Trust. The
Commissioner (Appeals) accepted the said plea. In second appeal, the
Tribunal came to the conclusion that there was no evidence to come
to the conclusion that the firm, in which the assessee-Trust was a
partner, stood dissolved, formally or informally, during the year
under appeal. The Tribunal, therefore, reversed the order made by
the first appellate authority.
In the
aforesaid circumstances, the entire controversy brought before the
Court is academic in nature. The case of the assessee is not that
the assessee-Trust was not a partner in the partnership firm, but
the contention is that the assessee has not received partnership
share or that the firm had been closed down. The Tribunal has found,
as a matter of fact, that there is no evidence in support of these
contentions.
In the
circumstances, the questions referred for the opinion of this Court
are left unanswered and the reference stands disposed of
accordingly. There shall be no order as to costs.
Sd/-
[ D.A.
MEHTA, J ]
Sd/-
[Z.K.
SAIYED, J ]
***
Bhavesh*
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