Commissioner of Income Tax vs Raipur Flour Mills (P.) Ltd.

C.P. Sen, J.—The Tribunal has referred the following question to this court u/s 256(1) of the Income Tax Act, 1961, for its opinion for the assessment year 1977-78 :

"Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in law in allowing deduction u/s 24(1)(i) of the Income Tax Act, 1961, in respect of repairs, from the income of the premises let out by the assessee ?"

Common questions arose in respect of the assessment years 1971-72, 1972-73, 1973-74 and 1976-77, pertaining to the assessment of the assessee, "Raipur Flour Mills (P.) Ltd." The question was whether the deduction claimed by the assessee on account of repairs to the building was allowable or not. The Income Tax Officer initially allowed deduction. The Commissioner of Income Tax, acting u/s 263 of the Income Tax Act, 1961, directed the Income Tax Officer to make fresh assessment in accordance with law. Thereafter, the Income Tax Officer disallowed the deductions claimed by the assessee. Separate appeals were preferred by the assessee to the Appellate Assistant Commissioner against the assessment orders pertaining to these years. The Appellate Assistant Commissioner allowed these appeals. The Department then preferred second appeals to the Tribunal which were rejected. The Tribunal held that the action of the Commissioner u/s 263 of the Act was not justified. In respect of the assessment year 1973-74, the aforesaid question of law was referred by the Tribunal to this court u/s 256(1) of the Act in Miscellaneous Civil Case No. 169 of 1977, which has been decided in favour of the Revenue, answering the question in the affirmative, on May 6, 1982 Commissioner of Income Tax Vs. Raipur Flour Mills (P.) Ltd., ). It was held :

"It was abundantly clear from the terms of the deed of lease that it was the responsibility of the lessee, the firm which had undertaken to keep the premises under proper repairs and in good condition and to bear the cost of all seasonal repairs during the continuance of tenancy. In these circumstances, there was no question of any clarification by the letters from the lessee to the Income Tax Officer when the deed of lease itself, clearly and in quite unambiguous terms, speaks of the liability of the lessee as to the repairs of the demised premises. In view of these facts and circumstances, there was no question of any deduction being allowed to the assessee u/s 24 of the Act and the Tribunal was clearly wrong in setting aside the order passed by the Commissioner."

Subsequently, a reference was made u/s 256(1), referring the same question, to this court for the assessment years 1971-72, 1972-73 and 1976-77, and relying on the earlier decision of this court, again, the question was answered in the affirmative. The matter has now been concluded by two decisions of this court. Therefore, the question is answered in the affirmative, in favour of the Revenue and against the assessee. There shall be no order as to costs, since the assessee has not come and opposed the reference.