Law:

Section:

Section 256, read with section 22, of the Income-tax Act, 1961 - Reference - Question of law - Whether a question of law arose from Tribunal's order holding that assessee-firm was not assessable on notional income as income from house property in respect of flats/bungalows constructed by it and sold to third parties to whom possession was handed over but deed of conveyance was not executed - Held, yes FACTS The assessee-firm constructed certain flats/bungalows and handed over the possession to the respective owners. However, during the relevant accounting year, the conveyance deeds were not executed in favour of the respective owners. The department assessed the assessee on notional income as income from house property in respect of the aforesaid flats. On appeal, the Tribunal held that the assessee was not assessable in respect of the income from the aforesaid flats as income from house property. The reference application of the department was also rejected. On an application under section 256(2): HELD In the instant case a question of law arose from Tribunal's order holding that the assessee was not liable to be assessed on notional income as income from house property in respect of flats/bungalows constructed by it and sold to third parties to whom possession was handed over but deed of conveyance was not executed. The Tribunal was directed to draw a statement of the case and to refer the same. G.S. Jetly, Mrs. Manjula Singh and K.C. Sidhwa for the Applicant. S.N. Inamdar for the Respondent. JUDGMENT Sugla, J.-By this application under section 256(2) of the Income-tax Act, 1961, the department has sought to refer the following two questions as questions of law: "1. Whether, on the facts and in the…

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