Law: Income Tax Act, 1961

Section: 256

(a) Income-tax--Reference---High Court---Power to reframe question---No power to frame question afresh on basis of statement of case---Only power is to answer questions referred by Tribunal---Indian Income Tax Act, 1961, S.256. It is not open to the High Court to frame questions afresh on the basis of the statement of the case. The only power of the High Court is to answer the questions referred by the Tribunal. (b) Income-tax--- ----Reference---High Court---Tribunal refusing to refer a question---Remedy of aggrieved party is to approach High Court under S.256(2)---Indian Income Tax Act, 1961, S.256(2). When the Tribunal refuses to refer a question, the remedy for the aggrieved party is to approach the High Court by way of a petition under section 256(2) of the Income Tax Act, 1961. CIT v. Anusuya Devi (Smt.) (1968) 68 ITR 750 (SC); CIT v. G.M. Chennabasappa (1959) 35 ITR 261 (AP); Ganga Ram Balmokand v. CIT (1937) 5 ITR 464 (Punj.); Raja Rameshwara Rao Bahadur v. CIT (1957) 32 ITR 552 (AP) and Shiva Prasad Gupta v. CIT AIR 1929 All. 819 ref. JUDGMENT MS. S.V. MARUTHI, J---The Tribunal at the instance of the assessee referred the following question: "Whether, on the facts and in the circumstances of the case, the. Appellate Tribunal is right in holding that the cost of roofing and foundations were not included in the Valuation Officers Report?" The facts in brief are as follows: "The assessee is a registered firm of 19 partners. One K.V. Reddy was the managing partner. They have purchased 75 cents or 3830 square yards of land in Sy. No.409/4 for Rs.15,000. They have also taken on long-lease from the Government an adjoining area measuring 445.56 sq.mts. The assessee-firm began constructing a cinema theater on the said site, which is subsequently named as Sri Laxmi Theater. According to the assessee the book value of the cost of the construction of the cinema house was Rs.6,45,392. The assessee filed the return accordingly, alongwith the approved valuers report. The income-tax Officer found that the cost of construction adopted by the registered valuer was very low and no proper basis has been given to such estimation for arriving at its cost of construction.…

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