1983 (9) TMI 56 - HC - Income Tax

Summary

Issues:
Assessment of income in the hands of the assessee as an individual versus a Hindu Undivided Family (HUF) status.

Analysis:
The case involved a dispute regarding the assessment status of the assessee, Smt. Ram Dulari, for the assessment years 1963-64 to 1966-67. The central question was whether the income from the estate left by her late husband should be assessed in her hands as an individual or as a member of a Hindu Undivided Family (HUF). The Income Tax Officer (ITO) initially assessed her as an individual due to the absence of a male member in the family after the death of her husband. However, the Appellate Assistant Commissioner (AAC) directed the status to be considered as that of a HUF. The matter was then taken to the Income-tax Appellate Tribunal, which held that the property inherited by the widow was her absolute individual property, especially after the adoption made by the late husband was declared void by the civil court. The Tribunal emphasized that there was no evidence to prove that the property was ever impressed with the character of HUF property.

The judgment delved into the legal framework concerning the concept of a Hindu Undivided Family (HUF) under the Income Tax Act, 1961. It highlighted that the term "Hindu undivided family" is not separately defined in the Act but is to be construed in line with its understanding under Hindu law. The judgment differentiated between properties that originally belonged to a subsisting HUF and those that did not. In cases where the property was ancestral or joint family property, even in the absence of a male member, the joint family status could be maintained as long as the property remained undivided among the widows. However, in cases where the property did not belong to a subsisting undivided family, the onus was on the assessee to establish that the property had been impressed with the character of HUF property. In the absence of such evidence, the property would be considered the individual property of the assessee.

Ultimately, the court ruled in favor of the Revenue, affirming that the income from the estate left by the late husband was to be assessed in the hands of the assessee as an individual. The judgment emphasized the importance of establishing the character of the property as HUF through concrete evidence, especially in cases where the property did not originally belong to a joint family. No costs were awarded in the case, considering the facts and circumstances presented.