1975 (1) TMI 11 - HC - Income Tax

Summary

Issues:
1. Assessment of income from property in a Dayabhaga Hindu undivided family.
2. Assessment of income from bustees in a Hindu undivided family.

Analysis:

Issue 1:
The case involved the assessment of income from property in a Dayabhaga Hindu undivided family for the assessment years 1961-62 to 1965-66. The Appellate Assistant Commissioner allowed the appeals in part, stating that income from house property should be assessed in the hands of individual members, while income from bustee lands should be assessed in the hands of the family. The Tribunal dismissed the department's appeals but allowed the assessee's cross-objections for the years, stating that income from bustee lands should be assessed in the hands of individual members based on previous court rulings. The department argued that income from the house property should be assessed in the hands of the family, contending that Hindu undivided family and association of persons are distinct for taxation purposes. However, the court disagreed, citing previous rulings that individual members inheriting properties should be separately assessed based on their shares.

Issue 2:
Regarding the assessment of income from bustees, the department contended that it should be assessed under "other sources" in the hands of the Hindu undivided family, not individual coparceners. The court rejected the assessee's claim under section 25A of the 1922 Act and stated that income from other sources should be assessed under relevant sections of the Acts. The court emphasized that the principles applied in previous cases were not applicable to income from other sources under the Income-tax Acts. The court differentiated the Wealth-tax Act from the Income-tax Act, stating that the rulings under the former did not apply to the assessment of income from other sources under the latter. Consequently, the court ruled in favor of the department, stating that income from bustees should be assessed under "other sources" in the hands of the Hindu undivided family.

In conclusion, the court ruled in favor of the assessee for Issue 1, assessing income from property in the hands of individual members, and in favor of the department for Issue 2, assessing income from bustees under "other sources" in the hands of the Hindu undivided family.