1993 (6) TMI 9 - HC - Income Tax

Summary

Issues Involved:
1. Competence of T.R.C. No. 5 of 1992 for the assessment year 1976-77.
2. Status to be assigned to the respondent/assessee for the assessment years 1978-79, 1979-80, and 1980-81.
3. Nature of the property obtained by the respondent/assessee in the partition and its impact under the Kerala Hindu Joint Family System (Abolition) Act, 1975.

Issue-wise Detailed Analysis:

1. Competence of T.R.C. No. 5 of 1992 for the assessment year 1976-77:
The court noted that the respondent/assessee did not dispute the status of "individual" for the assessment year 1976-77 before the Appellate Assistant Commissioner, and the appeal was dismissed. The Tribunal found that the Revenue was not aggrieved by the order and dismissed the appeal in limine. Consequently, the court held that T.R.C. No. 5 of 1992 was incompetent and unnecessary since the Revenue was not aggrieved by the order of the Appellate Tribunal or the first appellate authority. Therefore, T.R.C. No. 5 of 1992 was dismissed as incompetent and unnecessary.

2. Status to be assigned to the respondent/assessee for the assessment years 1978-79, 1979-80, and 1980-81:
The respondent/assessee submitted returns in the status of "individual" for all four years. The Appellate Assistant Commissioner modified the assessments for the years 1978-79, 1979-80, and 1980-81, accepting the assessee's claim based on the Kerala Hindu Joint Family System (Abolition) Act, 1975, that his wife was entitled to half share of the property. The status of "individual" was retained. However, the Appellate Tribunal held that the status to be assigned was "tenants-in-common" and directed that only half of the property would be due to the respondent/assessee, with the other half belonging to his wife. This part of the order was challenged by the Revenue in the revisions filed for the assessment years 1978-79, 1979-80, and 1980-81.

3. Nature of the property obtained by the respondent/assessee in the partition and its impact under the Kerala Hindu Joint Family System (Abolition) Act, 1975:
The court examined the nature of the property obtained by the respondent/assessee in the partition between himself and his only son as per the registered deed dated March 29, 1975. The court referred to authoritative texts on Hindu law, concluding that the property obtained by the respondent/assessee in the partition is his separate property. The court emphasized that the respondent's wife, not being a coparcener, had no right to claim partition or any share in the property. The court held that the property was not joint family property on the day when the Kerala Hindu Joint Family System (Abolition) Act came into force on December 1, 1976, and it remained the separate property of the respondent/assessee.

The court disagreed with the Appellate Tribunal's conclusion that the property should be deemed to be held as "tenants-in-common" and assessed only on half of the income. The court concluded that the respondent/assessee should be assessed in the status of "individual" on the entirety of the income from the property obtained in the partition.

Conclusion:
The court set aside the common order of the Appellate Tribunal dated June 19, 1991, for the assessment years 1978-79, 1979-80, and 1980-81, and remitted the matter to the Appellate Tribunal for passing appropriate orders in accordance with the court's observations. T.R.C. No. 5 of 1992 was dismissed, and T.R.C. Nos. 6, 7, and 8 were allowed to the extent indicated.