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Addl. Commissioner of Income-tax Vs. Vidhya Sagar Hasija - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtMadhya Pradesh High Court
Decided On
Case NumberMiscellaneous Civil Case No. 139 of 1976
Judge
Reported in[1979]117ITR249(MP)
ActsIncome Tax Act, 1961 - Sections 256(1)
AppellantAddl. Commissioner of Income-tax
RespondentVidhya Sagar Hasija
Appellant AdvocateA.M. Mathur, Adv. for ;Addl. Commissioner
Respondent AdvocateK.A. Chitale, Adv.
Excerpt:
- .....was justified in law in holding that the status of the assessee is that of an huf in regard to the share income from central india motors ?'2. the facts material for the purpose of this reference are as follows: the assessee is an individual and the assessment years involved in this reference are 1965-66, 1966-67, 1967-68 and 1968-69 for which the accounting years ended on 31st march, 1965, 31st march, 1966, 31st march, 1967, and 31st march, 1968. for the assessment year 1962-63 the assessee had filed a return, but it was revised by him on 3rd february, 1965. in the revised return, it was contended by the assessee that the income received from the firm carrying on business under the name and style of m/s. central india motors, indore, and m/s. ambassadors service central belonged to the.....
Judgment:

Sohani, J.

1. This is a reference under Section 256(1) of the Income-tax Act, 1961, hereinafter called 'the Act,' at the instance of the Addl. CIT, Madhya Pradesh, Bhopal. The Income-tax Appellate Tribunal, Indore, has referred the following question of law to this court for its opinion:

'Whether, on the facts and the circumstances of the case, the Tribunal was justified in law in holding that the status of the assessee is that of an HUF in regard to the share income from Central India Motors ?'

2. The facts material for the purpose of this reference are as follows: the assessee is an individual and the assessment years involved in this reference are 1965-66, 1966-67, 1967-68 and 1968-69 for which the accounting years ended on 31st March, 1965, 31st March, 1966, 31st March, 1967, and 31st March, 1968. For the assessment year 1962-63 the assessee had filed a return, but it was revised by him on 3rd February, 1965. In the revised return, it was contended by the assessee that the income received from the firm carrying on business under the name and style of M/s. Central India Motors, Indore, and M/s. Ambassadors Service Central belonged to the HUF of which he was the karta and the said income should not, therefore, be assessed in his capacity as an individual. The ITO did not accept this contention. On appeal, the AAC held that the share income from M/s. Central India Motors was liable to be taxed at the hands of the HUF only from the assessment year 1965-66. Thus for the assessment years 1965-66, 1966-67, 1967-68 and 1968-69 the AAC directed that the share income from M/s. Central India Motors be taxed at the hands of the HUF. Aggrieved by these orders, the department filed appeals before the Tribunal, Indore. By its order dated 16th April, 1971, the Tribunal dismissed those appeals. At the instance of the revenue, the Tribunal has made this reference.

3. For upholding the finding of the AAC that the status of the assessee is that of a HUF in regard to the share income from M/s. Central India Motors, the Tribunal took into consideration the facts that a revised return was filed by the assessee on 3rd February, 1965, declaring that the income received from M/s. Central India Motors belonged to the HUF of which he was the karta and also the fact that the assessee had made a declaration on23rd November, 1977 (1964?) in an affidavit sworn before a Notary affirming that the income received from M/s. Central India Motors belonged to the Hindu undivided family of which he was the karta. The Tribunal relied upon the aforesaid declarations and, in these circumstances, learned counsel for the revenue was unable to point out that the Tribunal had erred in law in holding that the status of the assesses was that of a HUF in regard to the share income from M/s. Central India Motors. As that income came to be taxed at the hands of the HUF for the assessment year 1965-66, when the revised return was filed, it is not necessary for us to consider the question as to whether the Tribunal was justified in holding that the property bequeathed to the assessee under the will executed by his father, who died in March, 1961, was held by the assessee as ancestral property for the benefit of his branch of the family. Even assuming that the property bequeathed to the assessee under the will became the self-acquired property of the assessee, the Tribunal was justified in holding that the status of the assessee was that of HUF in regard to the share income from M/s. Central India Motors as it has been found in the instant case that the said property was impressed with the character of joint family property by clear expression of intention by the assessee in that behalf.

4. For all these reasons, our conclusion is that on the view taken by the Tribunal about the intention of the assessee to impress the income received from M/s. Central India Motors with the character of joint family property, the Tribunal was justified in law in holding that the status of the assessee is that of a HUF in regard to the share income from M/s. Central India Motors. We answer accordingly the question referred to us for our opinion. Parties shall bear their own costs of this reference.


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