1. This is a reference under Section 256(1) of the the I. T. Act, 1961. The assessee is an individual. The statement of the case relates to the assessment years 1966-67 to 1969-70.
2. The assessee is the wife of one Chandra Kumar Agrwalla. She is the mother of two minor daughters, Dipika and Gitika. She is also the mother of a minor son, Sandwip, who was born during the accounting year relevant to the assessment year 1969-70.
3. In the course of the assessment proceedings for the aforesaid assessment years the ITO found that no income from dividends in respect of certain shares was shown by the assessee. He also found that some of those shares were also sold in the accounting year relevant to the assessment year 1969-70 and capital gains had arisen from such sales and it was not shown by the assessee. Being asked by him to explain the position, the assessee filed an affidavit.
4. She stated in that affidavit that she was a member of a HUF styled as 'Chandra Kumar Agarwalla, HUF' of which her husband was the karta and other members were Dipika and Gitika. She also stated in that affidavit that in or about 1965 all those shares valued at Rs. 1,90,027'39 were duly transferred to Dipika and Gitika in their capacity as members of the said HUF and it was declared by the assessee that the shares which stood in the names of those two minor daughters were thrown by her into the common hotchpot of the said HUF. Thus it was contended on her behalf before the ITO that neither the dividend income nor the said capital gains could be assessed in her hands and that they should be assessed in the hands of the said HUF.
5. The ITO rejected the contentions on the ground that a single male member along with the female members could not constitute a Hindu joint jamily and that the assessee not being a coparcener could not throw those shares into the common hotchpot.
6. The appeals filed by the assessee were dismissed by both the appellate authorities. Thereafter, the Tribunal referred the following question to this court :
'Whether, on the facts and in the circumstances of the case, the Tri-bunal was right in holding that the act of the assessee, a female, cannot be regarded as an act of throwing property into the common hotchpot of the HUF and thus the dividend income cannot be included in the total income of the HUF relating to the assessment years 1966-67, 1967-68 and 1969-70 ?'
7. Mr. Kalyan Ray, learned counsel for the assessee, fairly and rightly concedes before us that the aforesaid question of law is covered by thejudgment of the Supreme Court in the case of Pushpa Devi v. CIT : 109ITR730(SC) .
8. Mr. Ray, however, submits that we should send back this case to the Tribunal for deciding whether there was a gift in favour of the HUF in view of the aforesaid decision of the Supreme Court. In the aforesaid case, the Supreme Court directed the Tribunal to send a supplementary statement of the case on the question whether there was a gift in favour of the HUF.
9. Since the Supreme Court, at page 735 of the report, held that the question referred by the Tribunal to the High Court was comprehensive enough to cover the point whether there was a gift in favour of the HUF, Mr. Ray argues that the aforesaid question before us is also wide enough to cover the said issue.
10. Mr. Agit Sengupta, learned counsel for the revenue, argues that in theSupreme Court case the assessee was admittedly the owner of thoseproperties and it was her capital investment and share in the businesswhich were sought to be impressed with the character of the joint familyproperty. He further argues that in the instant case before us the sharessought to be transferred stood in the names of two minor daughters of theassessee and not in the name of the assessee herself and the assesseepurported to impress the said shares belonging to the minor daughterswith the character of the joint family. Further, the question whichwas raised by the assessee in the Supreme Court case was wide andin general terms and was also comprehensive enough to include that issueas pointed out in that judgment. In the case before us, according to Mr.Sengupta, the question is restricted in nature and scope. He draws ourattention to the question set out earlier and argues that the question beforeus is whether the act of the assessee, a female, cannot be regarded as anact of throwing property into the common hotchpot of the HUF and thusthe dividend income cannot be included in the total income of the HUF.He emphasises the word 'thus' to show the restricted nature of thequestion.
11. Mr. Sengupta also draws our attention to question No. 2 raised by the assessee in her application for reference at page 11 of the paper book. The said question is whether the Tribunal was correct in including the dividend income from the shares gifted to the joint family. Mr. Sengupta, therefore, argues that the assessee had raised a specific question on gifts in that application and the Tribunal had rejected it, for it has referred the only question which has been set out earlier.
12. Mr. Sengupta further submits that as the assessee did not make any application under Section 256(2) of the I. T. Act, 1961, against the rejection ofthe aforesaid question No. 2, Mr. Ray is not entitled to take the aforesaid plea. Mr. Senguta cites the decisions of the Supreme Court in Lakshmiratan Cotton Mills Co. Ltd. v. CIT : 73ITR634(SC) and CIT v. Kirkend Coal Co. : 74ITR67(SC) in support of his aforesaid submissions and also argues that since the shares belonged to the assessee's minor daughters, the question of making any gift by the assessee cannot arise and, in any event, the gift, if any, is on the face of the facts recorded in the statement of the case, is void being gift made by the minors.
13. The only argument of Mr. Ray in reply is that the Tribunal has not rejected question No. 2 formulated by the assessee in her aforesaid application uuder Section 256(1) of the Act. We are, however, not impressed by it.
14. The Tribunal has not referred the aforesaid question No. 3, nor could it refer it at all. Whether there has been any gift or not is a pure question of fact and whether there could be any such gift is a mixed question of law and fact. It was not even argued before the Tribunal that there was a gift, nor the Tribunal expressed any opinion on it. Therefore, it must be held that the Tribunal has rejected question No. 2 as it did not arise out of its appellate order.
15. It is also settled law that when the Tribunal rejects a specific question of law raised in an application under Section 256(1) of the Act, the petitioner must apply to the High Court under Section 256(2) of the Act for an order directing the Tribunal to send the statement of the case with the said question and if he fails to do so, it is no longer open to him to argue on the said question before the High Court.
16. The question referred by the Tribunal in our opinion is also very narrow and it does not admit the aforesaid plea of Mr. Ray which is not only a new plea but is not even its another aspect.
17. In the premises, the contention of Mr. Ray that we should refer back this matter to the Tribunal for deciding whether there was a gift in favour of the HUF must fail and accordingly we answer the question in the affirmative and against the assessee as it is covered by the judgment of the Supreme Court in Pushpa Devi's case : 109ITR730(SC) as rightly conceded by Mr. Ray.
18. There will be no order as to costs.
Sudhindra Mohan Guha, J.
19. I agree.