Rental income as business income and section 43B deductions were both directed for reference on connected legal questions.

Rental receipts from letting out properties were treated as a referable question on their assessability as business income, especially where an earlier High Court order had already directed reference of a similar issue. The applicability of section 43B to disputed urban land tax and related deductions was also held to depend on the first question and was therefore directed to be referred as well. The Tribunal was directed to state both questions of law together with the connected factual statement for the High Court's opinion.

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Issues: Whether the Tribunal should be directed to refer for the opinion of the High Court the questions whether rental receipts from letting out properties were assessable as business income and whether section 43B was applicable to the disputed urban land tax and related deductions.

Analysis: The petition was under section 256(2) of the Income-tax Act, 1961. On the first question, an earlier order of the same court had already directed reference of a similar question. The second question was held to depend upon the answer to the first question, and therefore also warranted reference along with the connected factual statement.

Outcome: The Tribunal was directed to refer both questions of law to the High Court along with the statement of facts.

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