Interpretation of partition deed and tax provisions created referable questions of law, requiring a Tribunal reference.

Interpretation of a partition deed and the application of section 24(1)(iv) and section 171 of the Income-tax Act, 1961 gave rise to referable questions of law. The Tribunal's refusal to state a case was unsustainable because its decision depended on construing the deed and applying the statutory provisions to the assessee's claim of annual charge. A reference under section 256(2) was therefore warranted, and the Tribunal was directed to refer the questions for the Court's opinion.

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Issues: Whether the Tribunal was justified in refusing to refer the questions arising from the interpretation of the partition deed and the application of section 24(1)(iv) and section 171 of the Income-tax Act, 1961.

Analysis: The dispute turned on the construction of the partition deed and the legal effect of the annual charge claimed by the assessee. The Tribunal had proceeded on the basis of its interpretation of the deed and the relevant provisions, but the Revenue contended that a question of law arose and should be referred. The Court found that the Tribunal's decision involved the interpretation of the partition deed as well as the application of section 24(1)(iv) and section 171 of the Income-tax Act, 1961, which gave rise to referable questions.

Conclusion: The Tribunal was required to refer the questions to the Court, and its refusal to do so was not sustained.

Final Conclusion: The petition succeeded and the Tribunal was directed to state the case and refer the questions for opinion of the Court.

Ratio Decidendi: Where the Tribunal's decision depends on the interpretation of a document and the application of statutory provisions giving rise to a question of law, a reference under section 256(2) of the Income-tax Act, 1961 is warranted.

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