1977 (2) TMI 20 - HC - Income Tax

Summary

Issues Involved:
1. Whether the assessee's status is Hindu undivided family (HUF) consisting of himself, his wife, and daughter.
2. Applicability of Explanation (b) to section 2(1) of the Hindu Succession Act, 1956, and related statutes.
3. Determination of the status of the child born to a Hindu father and a non-Hindu mother.

Issue-Wise Detailed Analysis:

1. Whether the assessee's status is Hindu undivided family (HUF) consisting of himself, his wife, and daughter:
The assessee, a Hindu, married a German Christian lady and had a daughter. Initially, he filed returns as an individual but later revised them claiming the status of HUF, excluding his director's remuneration from the family's income. The Income-tax Officer accepted the HUF status but included the remuneration. The Appellate Assistant Commissioner disagreed, stating the assessee could only be assessed as an individual. The Tribunal later upheld the HUF status, leading to the revenue's challenge.

2. Applicability of Explanation (b) to section 2(1) of the Hindu Succession Act, 1956, and related statutes:
The Tribunal relied on the decision in R. Sridharan v. Commissioner of Wealth-tax, which applied Explanation (b) to section 2(1) of the Hindu Succession Act and similar provisions in other Hindu laws. This explanation includes children with one Hindu parent, provided they are brought up as Hindus. The Supreme Court affirmed this, emphasizing the extended definition of "Hindu" under codifying Acts.

3. Determination of the status of the child born to a Hindu father and a non-Hindu mother:
The court examined whether the daughter, with a Christian mother, could be considered a Hindu under Explanation (b). The assessee admitted his wife and daughter were Christians. The court noted that for the child to be considered a Hindu, it must be brought up as a Hindu, as established in previous judgments. The assessee failed to provide evidence that his daughter was brought up as a Hindu. Therefore, the court concluded that the daughter could not be considered a Hindu, and thus, the family could not be assessed as an HUF.

Conclusion:
The court ruled that the assessee's family, consisting of himself, his Christian wife, and his Christian daughter, could not be considered a Hindu undivided family. The requirement that the child must be brought up as a Hindu was not met, as the daughter was acknowledged as a Christian. Consequently, the Tribunal's conclusion was deemed erroneous, and the question was answered in the negative, against the assessee. There was no order as to costs.