Commissioner of Income Tax vs Parasram Karamchand

D.A. Mehta, J.—The Tribunal, Ahmedabad Bench-B, has referred the following three common questions for the opinion of this Court, u/s 256(1) of the Income Tax Act, 1961 (the Act), at the instance of the Commissioner:

Whether on the facts and circumstances of the case, the Tribunal was right in holding that there was no formation of cross trusts?

Whether the Tribunal was right in law in holding that this is not a case of cross gifts because the amounts settled and the number of beneficiaries involved was not the same and the settlement had taken place at two different points of time?

Whether on the facts and circumstances of the case and in law, the Tribunal was right in law in holding that provisions of Section 64(1)(vii) of the Act are not applicable in the present case?

The assessment years are 1983-84 to 1985-86. It is not necessary to set out the facts in detail for the reasons that follow hereinafter.

Heard Mr. B.B. Naik learned standing Counsel for the applicant Revenue. Though served, there is no appearance on behalf of the assessee.

It is an admitted position that the assessment orders have been framed u/s 143(3) of the Act pursuant to order made by Commissioner of Income Tax (Commissioner) u/s 263 of the Act. The Commissioner has framed the order u/s 263 of the Act as a consequence of his own order u/s 263 of the Act in case of one Rakhi Beneficiary Trust v. ITO.

It has been concurrently found, both by the first appellate authority and the Tribunal that the Tribunal, Bombay Bench-D vide its order dated 30-11-1990 in the case of Rakhi Beneficiary Trust, has set aside the order of Commissioner made u/s 263 of the Act. Therefore, the assessments in the case of assessee for the three years under consideration framed u/s 143(3) of the Act pursuant to order u/s 263 of the Act cannot operate and the additions made u/s 64(1)(viii) of the Act have been deleted by the appellate authority. This order has been confirmed by the Tribunal. The Tribunal has recorded thus: "We have heard the learned departmental Representative and have also gone through the orders of the authorities below. We find that the Tribunal Bombay vide its order dated 30-11-1990 in the case of Rakhi Beneficiary Trust has already set aside the order of the Commissioner passed u/s 263 of the Act. During the assessment years under consideration the assessment orders were completed by the assessing officer u/s 143(3) of the Act in pursuance to the order of Commissioner, Bombay city Bombay made u/s 263 of the Act. The orders u/s 143/in the assessee''s case were framed as a consequential order. In that view of the matter, the DC(A) was justified in deleting the impugned additions and, therefore, we do not find any infirmity in the order of the DC(A)."

In the aforesaid factual matrix, it is apparent that the questions raised and referred by the Tribunal, are not questions which arise out of the impugned order of Tribunal dated 26-12-1996. Accordingly the reference stands disposed of without answering the questions as the questions do not arise out of the order of Tribunal.