Commissioner of Income Tax vs Princess Usha Trust

Shukla, J.—This order shall also dispose of Misc. Civil Case No. 46 of 1982 (Commissioner of Income Tax, Bhopal v. Princess Usha Trust, Indore) and Misc. Civil Case No. 47 of 1982 (Commissioner of Income Tax, Bhopal v. Princess Usha Trust, Indore), as a common question has been raised in all the three applications filed by the Commissioner of Income Tax, Bhopal, against the assessee, Princess Usha Trust, Indore, u/s 256(2) of the I.T. Act, 1961.

Assessment years involved in all the three cases are 1974-75, 1975-76 and 1976-77. Assessee is a trust and is assessed as an AOP. For the previous years relevant to the assessment years in question, the ITO included as income the annual letting value (ALV) of Manik Bagh Palace in the hands of the assessee-trust. In appeal, the AAC directed the ITO to exclude the ALV of the said palace from the total income of the assessee on the ground that under Part B States Taxation (Concessions) Order, 1950, the said palace was declared as the official residence of the Ruler of Indore State and, therefore, it was exempted from tax as per para. 15 of the said Order. The Revenue carried the matter before the Tribunal who confirmed the finding of the AAC.

We are satisfied that a question of law arises out of the order of the Tribunal for the three assessment years in question. The Income Tax Appellate Tribunal, Indore, is, therefore, directed u/s 256(2) of the I.T. Act, 1961, to state the case and to refer it for our opinion on the following question of law :

" Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the ALV of the Manik Bagh Palace was exempted from Income Tax under Part B States Taxation (Concessions) Order, 1950?"