1991 (4) TMI 81 - HC - Income Tax

Summary

Issues:
1. Ownership of investments in the names of legal heirs.
2. Assessment of entirety of investments in respective years under section 69 of the Income-tax Act, 1961.

Analysis:
1. Ownership of investments:
The case involved the assessment of investments in the names of legal heirs after the death of the assessee, Chellappan Chettiar. The Income-tax Officer concluded that the investments belonged to Chellappan Chettiar and were assessable in his hands under section 69 of the Income-tax Act, 1961. The Commissioner of Income-tax (Appeals) partially upheld this decision, stating that some investments belonged to the legal heirs, while others were deemed Chellappan Chettiar's income. The Tribunal affirmed the Commissioner's decision, emphasizing that the investments in the names of certain legal heirs did not belong to Chellappan Chettiar. The High Court concurred with the lower authorities, emphasizing that the evidence and materials supported the conclusion that the investments truly belonged to Chellappan Chettiar, not his children. The court found no misreading of evidence and concluded that no question of law arose regarding ownership.

2. Assessment under section 69:
The petitioners contended that even if the investments belonged to Chellappan Chettiar, assessing the entirety of the amounts in the respective years might not be valid under section 69 of the Act. They argued that the assessing authority should consider spreading the income over multiple years instead of assessing the entire amount in a single year. The Revenue argued that this point was not raised adequately before the lower authorities. However, the court acknowledged that the contention regarding the applicability of section 69 had been consistently made by the assessees. The court found that a question of law did arise on this point and directed the Income-tax Appellate Tribunal to refer the question of whether assessing the entirety of the amounts in each year was appropriate under section 69 for the court's decision. The court did not express a final opinion on the matter but deemed it necessary for further examination during the reference hearing.