This is appeal filed by assessee against order of AAC relating to assessment year 1978-79. In order to understand grounds of appeal, it appears that some background facts may be given. 2. dispute relates to question of income from property. Besides self-occupied property in Green Park, New Delhi, assessee owns house property at M-25, Greater Kailash. This property was constructed in year 1968. According to assessee, there were certain difficulties faced by him in finding out proper tenant for this house. assessee, therefore, entered into lease agreement with his brother D.R. Singhal and his wife Smt. Anjali Rani acting as partnership firm through Shri Balkrishan Gupta in name of B.K. Gupta & Co. From this agreement, it appears that it was house and commercial shop and assessee had leased this property at consideration o r Rs. 9,600 which was settled as annual theka value of ground floor and upper portion. This agreement which is stated to have been entered in 1968 was for period of five years. It is not clear from orders of lower authorities whether this agreement was further renewed after period of five years. assessee has been showing only rent received from this so-called partnership firm B.K. Gupta & Co. ITO, however, made enquiries and found that actual rent received was much higher and in respect of this property it was about Rs. 3,000 per month. According to him, total rent received from let out portion was Rs. 29,500. ITO proceeded to work out income on above basis. According to ITO assessee was owner and was liable to be taxed on actual rent received from this property. AAC has upheld this action of ITO. He referred to amendment made in law, according to which, actual rent has also to be taken into consideration for assessing income from property. AAC also directed that above expenses claimed by assessee should be considered and allowed to extent they are established. 3. learned counsel for assessee has submitted before us that action of lower authorities in assessing rent received by firm in hands of assessee was not justified as assessee was receiving amount which was fixed under agreement. He also submitted that genuineness of this agreement has not been gone into and that it was not possible to reject case of assessee. He drew our attention to Court cases which were responsibility of lessees. It was also contended that municipal corporation has fixed retable value at Rs. 12,500 only and that too was under dispute. It was, therefore, contended that more rent at Rs. 4,500 could not be assessed in hands of assessee. 4. We have perused paper book filed by assessee and we are of view that this matter should go back to ITO for proper determination of facts. large number of papers filed before us do not appear to have been furnished before lower authorities. It may be that ITO has not called for these papers but it was also duty of assessee to place these before him. It is necessary to go into question of genuineness of this agreement and also fact whether this agreement was further renewed after end of five years. parties involved should also be examined. Without that it is not possible to know whether arrangement was genuine. No doubt owner has to be assessed under provisions of Income-tax Act, but one has also to see legal effect of any valid subsisting agreement. ITO is, therefore, directed to bring on record all materials and to give clear finding regarding nature of agreement, its renewal and legal effect. He may also take into consideration assessments made in hands of firm known as B.K. Gupta & Co. With these directions, matter is restored to file of ITO for proper determination of facts so that income may be properly assessed. To this extent, appeal shall be treated as allowed for statistical purposes. Per Shri S.P. Kapur, Judicial Member-Having gone through with utmost respect and care, proposed order of my senior learned brother, Accountant Member and being not reconciled to his point of view as also directions to ITO 'to bring on record all materials' I jot down following note of dissent. 2. Men may tell lies but documents never and photostat copy of lease deed dated 25-6-1968 placed on our file as assessee's paper book (page 7) makes it amply clear rather beyond any doubt that there was lease agreement entered into by B.K. Gupta & Co. and assessee. subject-matter was house and commercial shop commonly known as M-25, Greater Kailash-I, New Delhi. said lease-deed also makes it amply clear that B.K. Gupta & Co. was constituted by Shri Bal Kishan Gupta son of Shri Shankar Lal and Smt. Anjali Rani, wife of Shri Brij Rattan Singhal (the assessee). lease-deed is registered document with endorsement No. 4030-Vol. No. 2,000-Bahi No. 1A, p p . 103 to 105, registered with competent authority (the Registrar). lease-deed is on non-judicial stamp paper of Rs. 101. This document warrants one and only irrefutable inference and it is that there was lease agreement between assessee and B.K. Gupta & Co. tenure being five years and corroborative evidence to above is copies of following documents: (i) Compromise terms in case of Barru Ram v. B.K. Gupta & Co. (Suit No. 159 of 1969) entered into by parties in that suit in Court of Shri Mohammed Shamim, Additional Rent Controller, Delhi, and it is dated 19-12- 1973 (page 8 of assessee's paper book); (ii) order dated 20-7-1971 of learned Rent Controller, Delhi, in Suit No. 54/SR of 1971 filed by Shri Baldev Raj Nagpal against B.K. Gupta & Co. whereby standard rent was fixed; (iii) copy of plaint in Suit No. 261/79 filed by B.K. Gupta & Co., M-25, Greater Kailash-I Market, New Delhi-48 against one Dr. Ashok Kumar Soni, plaint being application for eviction of tenant under section 14(1)(a) of Delhi Rent Control Act, 1958. This evidences factum of B.K. Gupta & Co. being landlords and Dr. Ashok Kumar Soni being tenant of property commonly known as M-25, Greater Kailash-I, New Delhi; (iv) lease-deed dated 10-2-1969 executed on non-judicial stamp paper of Rs. 25 between B.K. Gupta & Co. as lessors and one Shri Anand Kumar Micheal as lessee vis-a-vis demising unto lease, premises described as two room set with kitchen, bath and latrine on second floor of property M-25, Greater Kailash-I, New Delhi; (v) copy of lease-deed having been executed on non-judicial stamp paper or Rs. 30 only as between B.K. Gupta & Co. as lessors and one Shri Rakesh Kumar Neb as lessee vis-a-vis demise unto lessee premises- one shop in property M-25, Greater Kailash-I, New Delhi; (vi) copy of order dated 22-9-1977 which is judgment by learned Additional Rent Controller (Shri J.D. Kapoor) in Suit No. E-350/76 whereby B.K. Gupta & Co. is shown as petitioner and Smt. Vinod Kumar Chabra and another as respondent; (vii) copy of judgment order dated 26-11-1977 of learned Third Additional Rent Controller (Shri Kanwal Inder), showing B.K. Gupta & Co. as petitioners and Jaipur East, New Delhi, as respondent in application for eviction of tenant made under section 14. Here also let out premises are property No. M-25, Greater Kailash-I, New Delhi. 3. From above evidence which is unimpeachable in nature only inference that can be drawn is that lease agreement between assessee and B.K. Gupta & Co. was subsisting and genuine one during accounting period relevant to assessment year under appeal and being in vogue since date of execution of registered lease-deed mentioned above. No other inference is possible on facts and from material on record. above inference gets support from finding of learned AAC, New Delhi, who vide orders dated 19-12-1981 made in his appeal files No. 446, 463 and 464 of 1980- 81 in relation to assessment years 1975-76 to 1977-78, on appeals by assessee, observed as under: "In passing I may also observe that on basis of evidence as filed by assessee before Income-tax Officer, rent or property originally fixed by virtue of leased deed between assessee and B.K. Gupta & Co. in 1968 was quite in keeping with prevalent market conditions. This is so because as per letter dated 18-7-1981 of municipal corporation, retable value of property in question has been fixed at Rs. 12,500 per annum with effect from 1-4-1981 subject to dispute taken by assessee and now pending before Delhi High Court." 4. Yet that apart, assessee vide petition dated 14-12-1971 made with Hon'ble High Court of Delhi at New Delhi, which petition has since been registered as Civil Writ No. 1311 of 1971, has made averments that property M-25, Greater Kailash-I, New Delhi, was let out to B.K. Gupta & Co. on 24-6- 1968 by lease-deed duly executed on stamped paper and registered as No. 4080, Bahi No. 1, pp. 103 to 105 dated 25-6-1968. lease-deed is annexed to said petition as Annexure 'A'. Those pleadings by assessee before Hon'ble High Court support stand of assessee vis-a-vis letting out of property to B.K. Gupta & Co. being genuine arrangements and factually true and correct (copy of order of learned AAC) is placed on our file as assessee's paper book (pages 49 to 53) while copy of Civil Writ No. 1311 of 1971 is pages 42 to 46 of assessee's paper book. above factual position which is based on content evidence and material on record supports case of assessee and belies stand of lower authorities. I hold accordingly. 5. Yet that apart, in assessment order which is presently impugned before us, learned ITO while framing assessment observes that, "... property income from M-25, Greater Kailash, shall be taxed in hands of my assessee, i.e., Shri B.K. Gupta." 6. With above findings on record, property having been leased out by assessee to B.K. Gupta & Co. as from 24-6-1968 vide registered lease- deed dated 25-6-1968, and since continuing arrangements cannot be said to be sham, much less, ingenuine one or else that entire rental receipts actually belongs to assessee. jailer authorities seem to be influenced by situation of property, since learned AAC observes, "in present case actual rent that this property can fetch is Rs. 3,000 per month..." learned AAC has not appreciated date of lease which is 24-6-1968 when Greater Kailash-I was not known as colony even in Delhi. lower authorities seem to have been influenced by situation, viz., Greater Kailash-I, New Delhi, and it does not stand to reason. 7. apparent is real and correct state of affairs and registered lease-deed depicts true and correct state of things; to dislodge same, onus is on revenue and there is no material on file to warrant any other inference except that arrangements are genuine and returned income of assessee merits to be accepted. 8. To give second innings to ITO and to direct him to go into question of genuineness of agreement or else to direct him to bring on record all materials afresh, is to place assessee in disadvantageous position, since revenue is not in appeal, but assessee is. Secondly, if ITO can go into fresh evidence, this forum (Tribunal) can certainly do at its level also and evidence relied upon by assessee before us being of unimpeachable nature and cogent one, in petty case like this, which was Single Member case transferred to Division Bench because Single Member Case Bench was not functioning, will amount to delayed justice. Among others, one of glorious traditions of Tribunal is to dispense quick justice unfettered by technicalities and rules of evidence, hence, on my part, I will rely upon cogent evidence of assessee and hold in his favour, with result that appeal succeeds and returned income of assessee stands accepted. ORDER UNDER SECTION 255(4) OF INCOME-TAX ACT, 1961: We, having differed in above case, proceed to draw up following point of difference and refer case to President, Tribunal for referring matter to one or more other Members of Tribunal as required under section 255(4) of Income-tax Act, 1961 ('the Act'): "Whether, on facts and in circumstances of case, order of t h e lower authorities require to be set aside with directions as given in paragraph No. 4 of order of Accountant Member or appeal by assessee was to be accepted?" THIRD MEMBER ORDER Per Shri Ch. G. Krishnamurthy, President-The assessee in this appeal is individual deriving income mainly from property. There is also small income from business and from other sources which is both inconsiderable and not relevant for my present purpose. income from house property was declared at Rs. 4,550. assessee had two properties, one situated at Green Park and other at Greater Kailash bearing No. M-25, Greater Kailash. In respect of this property of Greater Kailash, claim of assessee was that under contract entered into between his wife and his brother on 29-6-1968, he was receiving rent of only Rs. 9,600 per year. Pursuant to that contract assessee computed income and eventually arrived at Rs. 4,550 but ITO was of opinion that this entering into agreement with his wife and his brother was only novel method adopted to divert income from house property. After those two persons referred to above took property on lease from assessee, they formed into partnership firm called B.K. Gupta & Co. and that firm let out property in course of its business in such way that its income was about Rs. 30,000 per year. ITO was of opinion that entire rental receipt received by that firm of B.K. Gupta & Co. was in truth and reality income of assessee. In support of this view, ITO grilled upon sections 22 and 23 of Act to say that income from house property could be taxed only in hands of owner and not in hands of other people like partners of B.K. Gupta & Co. Thus, he estimated income from property on basis of income received by B.K. Gupta & Co. at Rs. 29,500 and after making statutory deductions determined income at Rs. 18,506, to which was added other income from business and from other sources. Aggrieved by this method of assessment, assessee filed appeal before AAC. It was contended before AAC that lease of this property to B.K. Gupta & Co. was supported by registered lease-deed, lease having been given at time when Greater Kailash-I was totally undeveloped, rent fixed under lease was quite reasonable, considerate and accords with market value of property prevailing at that time and should have been accepted more particularly when department did not prove that lease was sham and income earned by B.K. Gupta & Co. was received by assessee. It was further pointed out that department acting upon this lease agreement has made assessment for assessment year 1969-70 on 3-12-1971. It was further pointed out that property having been leased to B.K. Gupta & Co., it was to open to assessee to get them vacated. Moreover, municipal corporation fixed latest retable value of property at Rs. 12,500 and that shows that lease of Rs. 9,600 fixed long before fixation of retable value by municipal corporation was genuine. AAC without dealing with all these points raised and concentrating her attention only on question whether it was open to ITO to adopt actual rent received in preference to retable value, held that action of ITO was justified. matter then came before Tribunal. 2. After considering contentions raised on behalf of assessee and department, learned Accountant Member, who spoke for Bench in his leading order, observed thus: "4. We have pursued paper book filed by assessee and we are of view that this matter should go back to ITO for proper determination of facts. large number of papers filed before us do not appear to have been furnished before lower authorities. It may be that ITO has not called for these papers but it was also duty of assessee to place these before him. It is necessary to go into question of genuineness of agreement and also fact whether this agreement was further renewed after end of five years. parties involved should also be examined. Without that it is not possible to know whether arrangement was genuine. No doubt owner has to be assessed under provisions of Income-tax Act, but one has also to see legal effect of any valid subsisting agreement. ITO is, therefore, directed to bring on record all materials and to give clear finding regarding nature of agreement, its renewal and legal effect. He may also take into consideration assessments made in hands of firm known as B.K. Gupta & Co. With these directions, matter is restored to file of ITO for proper determination of facts so that income may be property assessed. To this extent, appeals shall be treated as allowed for statistical purposes." learned Judicial Member, however, expressed his disagreement with this view with just most respect by going through his order with great care. He f e l t that learned Accountant Member was throwing doubts on genuineness of lease agreement and that facts on record did not support that view. He referred to number of Court cases in Court of Additional Rent Controller, involving this property and held that provided unimpeachable evidence that arrangement of lease between assessee and B.K. Gupta & Co. was genuine and subsisting. He also made reference to order passed by AAC for assessment years 1975-76 to 1977-78 in assessee's own case where lease agreement appeared to have been approved by him. When lease agreement was genuine, one should proceed to compute income on that basis and it would be unfair either to ignore it or to throw doubts upon it or to provide second innings to ITO to go into questions of genuineness of agreement again by directing him to bring on record material in support of that view. learned Judicial Member has converted direction given by learned Accountant Member in his order to advantage of his view and that is when ITO could be directed to take fresh evidence, it is open to Tribunal whose powers are co-extensive with that of ITO to look into fresh evidence and record finding thereon. evidence provided by assessee by way of Court cases which ultimately ended up in High Court provided ample proof that lease was very genuine arrangement and for this purpose there was no need at all to send case back to ITO. Thus, both learned brothers have differed and following difference of opinion was referred to President, who in turn, nominated me as Member to resolve difference, namely: "Whether on facts and in circumstances of case, order of t h e lower authorities require to be set aside with directions as given in paragraph No. 4 of order of Accountant Member or appeal Third by assessee was to be accepted?" 3. I have gone through record carefully and heard learned advocate for assessee Shri Bishan Lal and departmental representatives Shri J.S. Rao. Naturally both of them depended upon those orders which are, respectively, in their favour. In particular learned departmental representative pointed out that this was only device adopted to divert income. It is unthinkable that assessee, who has house in locality like Greater Kailash would lease it out to his wife and his brother and be satisfied with lesser income than property could fetch. Nothing is more easier for exploitation than house property to produce maximum income. There was no inhibition in way of assessee to let out property to same party as was let out by B.K. Gupta & Co. was only facade inserted to divert income from property. assessment made in past could not be guide in these matters more particularly when ITO on enquiry can come to different conclusions diametrically opposite to one arrived at in earlier years provided there diametrically opposite to one arrived at in earlier years provided there was evidence. There was ample evidence to justify his conclusions. It is, therefore, open to him to include income derived by B.K. Gupta & Co. in hands of assessee. When Tribunal was satisfied on first impression that view of ITO could be justified but with little more evidence being brought on record, there was nothing wrong in directing ITO to re-examine it to fill lacuna. If in process ITO is convinced about genuineness of arrangement, there was nothing preventing him from accepting assessee's contention nor did directions given by learned Accountant Member place fetter on his power. He, therefore, commended for acceptance view of learned Accountant Member. But other side relying on view expressed by learned Judicial Member has seriously disputed these contentions and pointed out that it is not open to department to keep on investigating into matters over and again every year almost in repetitive nature. That is not intention of Legislature nor does ITO get vested with that power. There is one thing to enquire into facts which come to light and suspecting already existing facts and inferences drawn therefrom. While enquiry on basis of former is permissible, enquiry on basis of latter is not only impermissible but even prohibited and even frowned upon by judicial authorities almost repeatedly. There are no new facts that have come to light of ITO except review of earlier views. order passed by ITO does not show any new facts having come to his light nor order of AAC. This very point has come up for consideration in assessment year 1977-78. ITO after going through entire record, agreement, evidence and reports of inspector came to same conclusion as ITO had come to in this year but on appeal Commissioner (Appeals) reversed it. Although department had preferred appeal to Tribunal, it did not question conclusion reached by Commissioner (Appeals) at all either impliedly or directly. It only questioned conclusion of Tribunal on correctness of application of provisions of section 147(a) of Act. Tribunal held that section 147(a) was rightly inapplicable and reference application filed thereon was also rejected. Thus, conclusion reached by Commissioner (Appeals) on appeal on merits had become final, department not having agitated that conclusion in appeal it accepted or must be deemed to have accepted. Such being position and in absence of any new facts question is, is it open to ITO to doubt arrangement arrived at and call it device or novel method adopted and is it open to Tribunal to direct ITO to re-examine it? He submitted, therefore, that when after exhaustive enquiry was made into facts and firm conclusion was reached against ITO, there was no need to have matter re-examined all over again. It is this exercise that was not normally accepted by judicial authorities, learned Judicial Member had advocated in his order. He therefore, pleaded that view expressed by learned Judicial Member should be accepted. 4. In my opinion there is any amount of weight and force in arguments addressed on behalf of assessee by learned counsel, Shri Bishan Lal. It is not as if enquiries that were directed to be made by learned Accountant Member were not made in earlier years. entire exercise was gone into. order passed for assessment year 1977-78 by ITO contained copious references on this aspect. For assessment year 1977-78 original assessment was completed under section 143(1) of Act accepting declared income by assessee in return. Subsequently, tax evasion petition was received by ITO from one Shri Anil Kumar. Thereafter ITO made enquiries, first by ITO who made assessment on firm of B.K. Gupta & Co. and later by ITO, who made assessment on assessee. On basis of report furnished by ITO assessing B.K. Gupta & Co. report was sent to Commissioner, who gave permission to ITO assessing assessee to reopen assessment under section 147(a). As consequence assessments for assessment years 1975-76 to 1977-78 were reopened. In course of reassessment proceedings summons under section 131 of Act were issued to assessee and to partners of B.K. Gupta & Co., namely, wife of assessee, Smt. Anjali Rani and Shri B.K. Gupta brother of assessee and also to complainant, Shri Anil Kumar. assessee's wife did not appear in response to summons but others appeared and their statements were recorded and opportunities were provided to cross- examine one by other. Shri Anil Kumar stated that entire income from property No. 25, Greater Kailash, property in question, belonged to assessee and that assessee was real owner of property and that lease agreement was only device adopted to evade tax. He also stated that he was tenant in premises and rental was Rs. 500 per month and that he was paying rent to Smt. Anjali Rani and Shri B.K. Gupta. He also submitted that on his failure to pay rent as it was instituted by Smt. Anali Rani as partner of firm, B.K. Gupta & Co., for non-payment of rent in Tis Hazari Court before Senior Sub-Judge and decree of Rs. 18,000 was obtained and that goods worth Rs. 18,000 were attached, that he had to pay sum of Rs. 18,000 on account of decree executed against him and another sum of Rs. 9,200 towards rent. Thus, total sum of Rs. 27,000 was recovered from him. inspector attached to ward was also deputed and he also gave his report. ITO went into lease-deed and recorded his findings thereon in assessment order and assessment order shows that detailed enquiry was made in very exhaustive way. eventual conclusion reached by him was that entering into of lease agreement with B.K. Gupta & Co. was only device adopted by assessee to provide sort of smoke screen to show that income was not realised by him but by firm of B.K. Gupta & Co. He also referred to point that under section 22 as well as section 23 of Act, income from house property will be assessed in hands of owner of property and since B.K. Gupta & Co. were not owners, they were not to be assessed on income from this property, which was also point now taken up by ITO in his order. It is this order of ITO that went before Commissioner (Appeals), who did not agree with ITO and reversed his view. As stated by Shri Bishan Lal and rightly though matter was taken up in appeal by department before Tribunal, conclusion of Commissioner (Appeals), on merits was not disputed. It, therefore, follows that entire matter has already been exhaustively inquired into by department in earlier years and definite conclusion in favour of assessee was recorded and nothing more new had come to light so as to deviate from that view unless it be that authorities deliberately want to ignore earlier decision on plea of non-application of principle of res judicata. reason adduced by ITO for years are similar to views given in earlier years also. I may add here that principle that rule of res judicata does not apply to income-tax proceedings is not such as that it would not apply to all cases. This very point has come up for consideration before me as Third Member and relying upon decision of Madhya Pradesh High Court in case of CIT v. Bhilai Engg. Corpn. (P.) Ltd. [1982] 133 ITR 687, I have held that principle of res judicata is no doubt inapplicable to income-tax proceedings but not in all and every situations. Unless new facts come to light or there is evidence to show that either decision reached was arbitrary or perverse decision reached in earlier years should not be deviated from. In this case there is nothing to show that either any new facts have come to light or that decision reached in earlier years was arbitrary, perverse or ill-considered. Therefore, there is no need to send case back to ITO to reconsider same afresh. This in my opinions not called for and is unnecessary exercise, on other hand there is ample evidence by way of Court cases to whom that lease agreement was acted upon. Even Shri Anil Kumar did not say that he paid rent to assessee even in execution of Court decree. I am, therefore, of opinion that case need not be sent back to ITO for examination of issue referred to in paragraph No. 4 of learned Accountant Member's order. Since genuineness of matter has been gone into in earlier years, and eventually in appeal it was held in favour of assessee that decision should prevail and following that decision and other materials brought on record and relied upon by learned Judicial Member, I would hold that assessee's appeal deserves to be accepted. 5. Now matter will go back to regular Bench for disposing of appeal in accordance with opinion of majority. *** B. R. SINGHAL v. INCOME TAX OFFICER