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Commissioner of Income-tax Vs. Mulkh Raj and Sons - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtAllahabad High Court
Decided On
Case NumberIncome-tax Reference No. 232 of 1977
Judge
Reported in(1982)27CTR(All)327; [1982]135ITR89(All); [1982]10TAXMAN300(All)
ActsIncome Tax Act, 1961 - Sections 64(2); Taxation Laws (Amendment) Act, 1970
AppellantCommissioner of Income-tax
RespondentMulkh Raj and Sons
Appellant AdvocateR.K. Gulati, Adv.
Respondent AdvocateM. Katju, Adv.
Excerpt:
- - mulkh raj in his individual capacity filed an appeal before the appellate tribunal, which failed......31, 1973, was also obtained. the question arose as to whether this income should be taxed in the hands of mulkh raj as an individual or included in the income of m/s. mulkh raj & sons, huf. the ito assessed the income both in the hands of mulkh raj, individual, and also in the hands of the huf. on appeal, the aac set aside the assessment of the huf, the assessment of the income in the hands of the individual was sustained. mulkh raj in his individual capacity filed an appeal before the appellate tribunal, which failed. thereafter, a reference was filed in this court, which also was answered against him. the case is reported in : [1979]120itr387(all) (mulkh raj v. cit). the commissioner of income-tax appealed against the order of the aac annulling the assessment of the huf. the tribunal.....
Judgment:

C.S.P. Singh, J.

1. The Income-tax Appellate Tribunal, Delhi Bench C, has referred the following question of law for our opinion :

'Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the interest income of Rs. 1,000 and share income of Rs. 8,204 from the firm of M/s. Sohna Mal Hakim Chand & Co. should be excluded from the assessment of the assessee-Hindu undivided family

2. It appears that Mulkh Raj had deposited Rs. 20,000 in his individual account with the firm, M/s. Sohna Mal Hakim Chand & Co. Mulkh Raj sought to impress this money with the character of HUF property with effect from March 19, 1972. He claimed to have become a partner of the firm in his capacity as the karta of an HUF in the aforesaid firm, as from September 4, 1972. An amount of Rs. 1,000 was earned as interest on this deposit for the period April 1, 1972, to September 3, 1974, and share income to the extent of Rs. 8,204 for the period from September 4, 1972, to March 31, 1973, was also obtained. The question arose as to whether this income should be taxed in the hands of Mulkh Raj as an individual or included in the income of M/s. Mulkh Raj & Sons, HUF. The ITO assessed the income both in the hands of Mulkh Raj, individual, and also in the hands of the HUF. On appeal, the AAC set aside the assessment of the HUF, The assessment of the income in the hands of the individual was sustained. Mulkh Raj in his individual capacity filed an appeal before the Appellate Tribunal, which failed. Thereafter, a reference was filed in this court, which also was answered against him. The case is reported in : [1979]120ITR387(All) (Mulkh Raj v. CIT). The Commissioner of Income-tax appealed against the order of the AAC annulling the assessment of the HUF. The Tribunal has dismissed the appeal. As the matter stands, the assessment of Mulkh Raj, individual, has become final. The income sought to be included in the hands of the HUF has already now been finally assessed as the income of Mulkh Raj, individual, In view of the proviso to Section 64(2) of the I.T. Act, 1961, once a particular income is included in the total income of an individual, it has to be excluded from the total income of the family, etc. This provides a complete answer to the contentions of the Commissioner.

3. The question is answered in the affirmative, in favour of the assessee, and against the department. The assessee is entitled to its costs, which are assessed at Rs. 250.


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