1986 (6) TMI 2 - HC - Income Tax

Summary

Issues:
1. Interpretation of Hindu Succession Act, 1956 regarding the status of an individual in a Hindu undivided family.
2. Assessment of income from inherited properties as individual or Hindu undivided family.
3. Applicability of section 6 of the Hindu Succession Act, 1956 on properties received through partition.
4. Conflict between different High Court judgments on the interpretation of Hindu Succession Act.

Analysis:
The judgment involves an application under section 261 of the Income-tax Act, 1961, where the Commissioner of Income-tax sought certification for appeal to the Supreme Court regarding Income-tax Reference No. 173 of 1978. The main issue was whether the assessee, governed by the Mitakshara School of Hindu Law, should be considered an individual or a member of a Hindu undivided family in relation to inherited properties and business. The assessee claimed that the properties inherited were personal and not joint family properties, which was rejected by the Income-tax Officer, Appellate Assistant Commissioner, and the Tribunal.

The key question referred to the court was whether the income from specific properties could be included in the assessment of the assessee as a Hindu undivided family. The court, in its judgment, referred to a previous case involving the brother of the assessee where a similar issue was resolved in favor of the assessee. The court emphasized the importance of the deed of partition in determining the nature of inherited properties and the status of the assessee.

The judgment also discussed conflicting decisions from different High Courts on the interpretation of the Hindu Succession Act, particularly regarding properties received through partition. The court highlighted the differing views of the Allahabad High Court and the Gujarat High Court on ancestral properties and coparcenary rights. Additionally, the Madras High Court's interpretation of section 6 of the Hindu Succession Act was discussed, along with the Supreme Court's affirmation of the same in a related case.

Ultimately, the court concluded that the controversy surrounding the interpretation of the Hindu Succession Act had been settled by the Supreme Court's observations. As a result, the application for certification to appeal to the Supreme Court was dismissed. Both judges, Dipak Kumar Sen and Mrs. Monjula Bose, concurred with the decision, and no costs were awarded in the matter.