Referable question of law arose on exclusion of palace property income under tax concessions order.

A common question of law arose from the Tribunal's order on whether the exclusion of the annual letting value of Manik Bagh Palace, claimed under the Part B States Taxation (Concessions) Order, 1950, was sustainable in the assessee-trust's assessments. The High Court held that the Revenue's applications disclosed a referable legal issue under section 256(2) of the Income-tax Act, 1961, and that the Tribunal was required to state the case. The Tribunal was therefore directed to refer the question for the Court's opinion.

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Issues: Whether a question of law arose from the Tribunal's order so as to require a reference under section 256(2) of the Income-tax Act, 1961.

Analysis: The assessment years were 1974-75, 1975-76 and 1976-77. The assessee-trust had been assessed as an association of persons, and the Income-tax Appellate Tribunal had upheld the exclusion of the annual letting value of Manik Bagh Palace on the basis of the Part B States Taxation (Concessions) Order, 1950. The Court found that the Revenue's applications disclosed a common question of law arising from the Tribunal's order, warranting a reference.

Conclusion: A question of law did arise, and the Tribunal was directed to state the case and refer the question for opinion.

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