1977 (3) TMI 26 - HC - Income Tax

Summary

Issues: Whether the holdings of the wife could be clubbed along with the holdings of the petitioner.

Analysis:
The judgment delivered by Justice Mohan addresses three writ petitions concerning the assessment of agricultural income tax. The petitioner claimed that the properties retained by him after a settlement with his wife were ancestral and should be considered as belonging to the Hindu joint family. However, the petitioner filed the returns as an individual, not as the manager of the joint Hindu family, for the assessment years 1970-71 and 1971-72. Consequently, the assessment was made under section 9(2) of the Madras Agricultural Income-tax Act, and it was upheld by the Commissioner of Agricultural Income-tax. The court found no grounds to challenge these assessments as the petitioner did not file returns as the manager of the joint Hindu family.

In the case of the assessment year 1972-73, the petitioner filed returns for ancestral properties held jointly with his wife as the manager of the joint Hindu family. The properties were owned by his wife under a settlement, and a separate return was filed for them. Justice Mohan referred to the decision in N. V. Narendranath v. Commissioner of Wealth-tax, which established that a joint Hindu family can exist concerning ancestral properties held by the petitioner and his wife. The court emphasized that the returns were not filed by the petitioner as an individual but on behalf of the joint Hindu family, warranting a different assessment approach.

The respondent argued that section 9(1) of the Act should apply in the assessment for 1972-73. However, the court ruled against this contention, stating that the settlement deed completely transferred all interests to the wife, precluding the clubbing of income between the petitioner as the karta of the joint Hindu family and the wife's separate holdings. The court found the previous assessment orders manifestly wrong for this assessment year and quashed them, remitting the matter for a fresh assessment based on the observations provided.

While the orders for the assessment years 1970-71 and 1971-72 were upheld and the respective writ petitions were dismissed, the writ petition for the assessment year 1972-73 was allowed. The court directed the matter to be reconsidered by the Agricultural Income-tax Officer for fresh assessment in line with the judgment. No costs were awarded in any of the writ petitions.