Law:

Section:

Section 256 of the Income-tax Act, 1961 - Reference - Question of law - Whether on a reference question of law has to be answered by High Court on basis of facts and circumstances either found by Tribunal or admitted by parties before Tribunal and High Court has to confine itself to such facts and, therefore, where facts found by Tribunal were not disputed before it by either party at appellate stage neither were they controverted at time of reference, later on department could not be allowed to ask High Court to decide on different facts or even to direct Tribunal to examine facts afresh - Held, yes Facts In the relevant year, the assessee-company sold a land through one of its branches which resulted in surplus of certain amount. During the relevant assessment year, the assessee in its return showed the said amount as business income and the assessment was completed as such. On appeal, before the AAC, the assessee contended that the said sum be excluded from the assessment on the ground that the transaction was not one in the course of business and that being a transaction on agricultural land, even capital grain was not attracted to the case. The AAC, however, rejected the contention of the assessee. On second appeal, the Tribunal also rejected the assessee's contention on the ground that the facts of the present case were similar to the facts of an earlier assessment year in respect of the assessee in which the Special Bench had decided against the assessee. On reference : Held The reference made to the High Court against the said order of the Special Bench referred to by the Tribunal in the present case had been answered in favour of the assessee and, therefore, in the instant case also, the contention of the assessee had to be accepted since it had been a common ground that the facts for both the years were similar. The department, however, contended that the facts for the aforesaid two years were different and, therefore, a different view in the present case was to be taken. But this contention couldn't be of any help to the department because it is well settled proposition that a reference in income-tax matters is on a question of law and that this…

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