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Issues:
Interpretation of Kerala Joint Hindu Family System (Abolition) Act, 1975 in relation to the assessment status of the assessee as a Hindu joint family for the years 1977-78 to 1983-84. Analysis: The Revenue argued that the assessee, born in the area that later became the State of Kerala, should be bound by the enactments of Kerala, including the Kerala Joint Hindu Family System (Abolition) Act, 1975, even though the assessee had been a British subject before independence and had worked and settled in Tamil Nadu. The Assessing Officer sought to assess the assessee as an association of persons based on the Kerala Act, despite previous assessments as a Hindu joint family. The Tribunal disagreed with this approach, holding that the assessee should be treated as a Hindu joint family. The Tribunal's decision was supported by the High Court, emphasizing that the Kerala Act applies only within Kerala and not to individuals domiciled outside the state. The assessee, who had been assessed as a Hindu undivided family in Tamil Nadu, should not be affected by the Kerala Act merely due to owning properties in Kerala. The Court cited the Supreme Court's ruling in CIT v. N. Ramanatha Reddiar (HUF) [1996] 222 ITR 765, which clarified that the Kerala Act does not apply to assessments outside Kerala for individuals permanently domiciled elsewhere. Therefore, the High Court concluded that the Kerala Joint Hindu Family System (Abolition) Act, 1975, was inapplicable to the assessee, affirming the Tribunal's decision to assess the assessee only as a Hindu undivided family for the relevant assessment years. The judgment favored the assessee and ruled against the Revenue's contention, highlighting the importance of domicile and the limited territorial scope of state-specific enactments in tax assessments.
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