BHAGABATI PRASAD BANERJEE, J.

( 1 ) THE Tribunal has referred the following question of law to this court under Section 256 (1) of the Income-tax Act, 1961 :" Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that income from vacant lands at Howrah was assessable in the hands of the company even though the legal ownership therein vested in the individual members of the family "

( 2 ) THE assessment years involved are 1970-71, 1971-72, 1976-77 and 1977-78 for which the relevant accounting periods ended on December 31, 1969, December 31, 1970, December 31, 1975, and December 31, 1976, respectively.

( 3 ) THE facts of the case as they appear from the statement of case are as follows :

( 4 ) FOR the assessment years 1970-71, the Income-tax Officer noted that the income was shown by the assessee at Rs. 66,954 from property only. Before the Income-tax Officer, a reference was made to the decision of the Tribunal in Income-tax Appeals Nos. 5275 to 3277/ (Cal) of 1971-72, in which it was held that the income from house property was not assessable in the hands of the assessee-company. The Income-tax Officer took note of another decision of the Tribunal in the case of Ballavdas Iswardas, Hindu undivided family (Appeal Nos. 3554 to 3556/ (Cal) of 1976-77) in which it was held that there was a partition of the Hindu undivided family on October 13, 1954. It was noted that the property income, therefore, did not belong to the Hindu undivided family and that the same was assessable in the hands of the individual members of the family. In respect of the income from lands at Howrah, it was submitted that the assessee-company was not the legal owner of the vacant lands and that the income thereof should be considered in the hands of the individual members of the family. The Income-tax Officer observed that the income from vacant lands has been assessed in the hands of the individual members on protective basis. According to the Income-tax Officer, it is not necessary that only the legal income would be assessable under the Act and that the legal effect of the transaction is that the legal ownership remained with the members of the family who by implied consent, have allowed the company to use the lands for its benefit. He, therefore, concluded that the income from vacant lands would be assessed in the hands of the assessee as income from other sources.

( 5 ) IN respect of the assessment years 1971-72, 1976-77 and 1977-78, the Income-tax Officer, as held in the assessment year 1970-71, assessed the income from vacant lands in the hands of the assessee as income under the head " income from other sources".

( 6 ) THE assessee took up the matter before the Commissioner (Appeals) who, by a consolidated order, sustained the order of the Income-tax Officer. The Commissioner (Appeals) considered the decision of the Tribunal and the decision of the Hon'ble Calcutta High Court in CIT v. Ganga Properties Ltd. [1970] 77 ITR 637. He noted that, in the present appeals, the issue was limited to the taxing of the incomes from vacant lands and not the house properties. He noted that the Tribunal, in its order dated September 4, 1972, in respect of the assessment year 1962-63, has observed that the income to be taxed from rental receipt from vacant land would have to be dealt with on a different footing. He also referred to the provisions of Section 56 of the Act which, according to him, is wide in its scope and includes income of every kind which is not excluded from the total income chargeable to tax. He also referred to the memorandum and articles of association dated October 31, 1953, in order to ascertain the objects of the company. He also made further observation that the members of the Hindu undivided family orally agreed to transfer the house property and lands received by them on partial partition to the company which agreed to issue shares to the co-owners in proportion to their interest in the

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