CWT vs S.M. Arif

The Income Tax Appellate Tribunal, Allahabad has referred the following question of law u/s 256(1) of the Income Tax Act, 1961,hereinafter referred to as the Act for opinion to this Court:

Whether on the facts and in the circumstances of the case, the Tribunal was justified inholding that the property situated at Nawal Kishore Road, Lucknow stood transferred to the wife of the assessee Farzana Arif, in satisfaction of her claim for Mehr and that the income of the said property should therefore be assessed in her hands and not in the hands of the assessee.

The present reference relates to the assessment years 1981-82 to 1984-85.

Briefly stated the facts giving rise to the present Reference are as follows:

The assessee owned a property at Naval Kishore Road, Lucknow Ashiyana which was allegedly transferred by him in favour of his wife in lieu of Mehr without execution of a formal conveyance deed. It is the lady who has been returning the income from the said property since thereafter and is being assessed as such. The assessing officer, however, did not accept that the property belonged to the lady on the count that it had not been transferred in her name by way of a formal registered conveyance. During first appeal, the Commissioner of Appeals accepted the assessees plea following the Tribunals decision in the assessees own case in respect of the assessment years 1979-80 and 1980-81 whereby the assessees plea was accepted. On second appeal, the Tribunal followed the earlier view taken by it on the count that insofar as the Appellate Tribunal was concerned, nothing survived in the matter, the assessees plea already having accepted, reference pending before the Honble High Court notwithstanding.

We have heard Sri R.K. Upadhyay, learned Standing counsel for the revenue. However, nobody has appeared on behalf of the respondent-assessee.

We find that similar controversy came for consideration before this Court in the case of respondent-assessee himself in The Commissioner of Income Tax (Central) Vs. Shekh Mohd. Arif, Prop. of Lucknow Timber Store, wherein this Court had answered the question referred to it in favour of the assessee and against the revenue.

Respectfully following the aforesaid decision, we answer the question referred to us in favour of the assessee and against the revenue. However, there shall be no order as to costs.