- (1.) By this reference application under Section 256(1) of the Income-tax Act, 1961, the Tribunal has referred the following question of law for our opinion : "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in reversing the order of the Commissioner of Income-tax (Appeals) and in holding that loss or shortfall on account of administrative or maintenance charges of the society could not be adjusted against the house property income of the society ?"
(2.) The assessee is a co-operative housing society for the assessment year under consideration. It claimed deduction on maintenance and administ rative charges. On an examination of the profit and loss account, the Income-tax Officer has noticed that all the expenses were incurred for maintaining the society's building for the benefit and services to the members. According to the bye-laws of the society, management and maintenance expenses were to be reimbursed by the members themselves. The Income-tax Officer also pointed out that there was no provision for allow- ing maintenance and management expenses of the co-operative society against the income from other sources. The income was taxed under the head "Income from house property".
(3.) In appeal from the Commissioner of Income-tax (Appeals), the Commissioner of Income-tax (Appeals) has directed the Income-tax Officer to deduct the loss in the administrative heads out of the house property income as well as other sources and recompute the income/loss for three years accordingly.;