Law:

Section:

Section 254 of the Income-tax Act, 1961 - Appellate Tribunal - Powers of - Assessment year 1963-64 - Petitioner/assessee-company was owner of tea estate - Under an agreement of sale executed on 31-3-1962, one 'B' agreed to purchase said tea estate - Agreement was to take effect from 1-1-1962 - 'B' also had made payment to vendor by way of earnest money - ITO held 'B' was owner of tea estate in relevant previous year, therefore, whole income from tea estate was liable to be taxed in his hands but since return had been filed in status of firm in name of assessee, ITO made prospective assessment taking status of assessee as unregistered firm - AAC cancelled assessment relating to assessee - He also held that 'B' was not in possession of tea estate nor carried on business during relevant previous year and, thus, deleted amount from his assessment - Tribunal held that AAC had not applied its mind to questions whether assessee could be registered as firm for relevant assessment year or it was to be treated as unregistered firm, whether firm was existence during year 1962 and whether firm was carrying on its business during said year - Tribunal, accordingly, set aside order of AAC and remanded matter to him for fresh disposal in accordance with law - Whether Tribunal's order was clearly within its jurisdiction under section 254 and, therefore, it could not be made subject-matter of reference - Held, yes FACTS The assessee was the owner of a tea estate. The agreement of sale was made on 31-3-1962, for purchase of the said tea estate from 'K' company by 'B' and 'C' and it was stipulated that the deed of conveyance in respect of the said tea estate would be executed in favour of the purchaser, 'B', and/or his nominee or nominees to be named afterwards and that the sale would be deemed to have taken effect as from 1-1-1962, and that from that date the vendor, 'K' company, would be deemed to have carried on the business of managing the said tea estate on behalf of the purchaser as an agent and would account for and be indemnified by the purchaser accordingly. It was also provided in the deed of agreement that the purchaser would be entitled to the sale proceeds of the tea…

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