COMMISSIONER OF INCOME-TAX VS K.C.P. LTD.
1999 P T D 2063
[226 I T R 791]
[Andhra Pradesh High Court (India)]
Before P. Venkatarama Reddy and P. Ramakrishnam Raju, JJ
COMMISSIONER OF INCOME-TAX
Versus
K.C.P. LTD.
I.T.C. No.82 of 1990, decided on 10/11/1995.
Income-tax---
----Reference---Finding by Tribunal that land and buildings were handed over is purely a finding of fact---Question whether in the absence of a transfer deed deduction under S. 35(2-A) can be allowed not considered by ITO nor raised before Tribunal---Hence, question whether there was a donation of immovable property in the absence of a valid transfer of title by registered conveyance cannot be referred---Indian Income Tax Act, 1961, Ss.35(2-A) & 256(2).
Reference was sought on the questions (1) whether the words "sum paid" would include "donation in kind" for the purpose of section 35(2-A) of the Income Tax Act, 1961; (2) whether there was a donation of immovable property even in the absence of a valid transfer of title by a registered conveyance, and (3) whether the amount of Rs.4,20,287 can be considered as payment under section 35(2-A) even though the Government of India categorically restricted the amount of donations by KCP Ltd. to Rs.2 lakhs only. The first question was referred by the Tribunal but the Tribunal declined to refer questions Nos.2 and 3. On a reference application under section 256(2):
Held, that the second question did not arise out of the order of the Tribunal since the question whether in the absence of a transfer deed executed and registered, the deduction could be allowed was not considered by the Income-tax Officer nor was it raised before the Tribunal. The third question also did not arise out of the order of the Tribunal.
CIT v. Scindia Steam Navigation Co. Ltd. (1961) 42 ITR 589 (SC) ref.
S. R. Ashok for Petitioner.
C. Kodandaram for Respondent.
JUDGMENT
P. VENKATARAMA REDDY, J.---The Revenue sought reference of the following three questions for the opinion of this Court:
"(1) Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the words 'sum paid' would include donation in kind for the purpose of section 35(2-A).
(2) On the facts and in the circumstances of the case, was the Appellate Tribunal justified in holding that there was a donation of immovable property even though there was no valid transfer of title by a registered conveyance?
(3) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal had material to come to a conclusion that an amount of Rs.4,20,287 can be considered as payment under section 35(2-A) even though the Government of India by specific conditions in the notification, dated July 8, 1977, restricted categorically the amount of donations by the KCP Ltd. to Rs.2 lakhs only and not more?"
The first question alone was referred by the Tribunal. The Tribunal declined reference of the other two questions on the ground that they do not arise out of the order of the Tribunal. As far as the third question is concerned, as rightly pointed out by the Tribunal, it does not arise out of the order of the Tribunal because no such question cropped up for discussion nor was there any occasion for considering such question even going by the findings recorded in the assessment order.
Coming to question No.2, in the assessment order, it is stated that the land and the buildings were not handed over to the University during the relevant year and the assessment, therefore, did not "reach finality". The Tribunal after adverting to the relevant material in this behalf has recorded a categorical finding that the land and the buildings were in fact handed over to the University during the relevant year. That is purely a finding of fact. The further question whether in the absence of a transfer deed executed and registered, the deduction can be allowed, was not considered by the Income?tax Officer, nor was it raised before the Tribunal. In the circumstances, applying the tests laid down by the Supreme Court in CIT v. Scindia Steam Navigation Co. Ltd. (1961) 42 ITR 589, we are unable to say that question No.2 arises out of the order of the Tribunal. Learned standing counsel has submitted that the Income-tax Officer only meant that title was not legally transferred during the relevant year and, therefore, the assessee was not entitled to the benefit under section 35(2-A) of the Act. It is difficult to agree with this contention. We cannot read some words into the order of the Income-tax Officer. The fact that the argument was not raised in that form by the Departmental representative before the Tribunal to counter the argument of the assessee, reinforces our view that the Income-tax Officer's finding cannot be read in the light in which learned standing counsel wants us to read it. We, therefore, see no ground to direct reference of the questions Nos.2 and 3.
The I.T.C., is accordingly dismissed. No costs.
M.B.A./1950/FC???????????????????????????????????????????????????????? ?????????? Application dismissed.