1982 (4) TMI 77 - AT - Income Tax

Summary

Issues:
1. Whether the income from the property inherited by Bhai Rajen is liable to be assessed as income of the Hindu Undivided Family (HUF) or in the status of an individual for the assessment years 1975-76 and 1976-77.

Detailed Analysis:
The appeal before the Special Bench of the ITAT Ahmedabad involved a complex issue regarding the assessment of income from a property inherited by Bhai Rajen. The deceased, Late Rameshchandra Chokshi, left behind separate and self-acquired property, with his widow relinquishing her interest in the property upon marrying Shri Arvindbhai M. Shah. The income from the property was initially assessed in the status of an individual but later as the income of an HUF comprising Bhai Rajen, his wife, and their son. The dispute centered around the period before Bhai Rajen's marriage and the birth of his son, questioning the assessment status of the income during that time.

The arguments presented by the parties, Shri Shah and Shri Mittal, revolved around the nature of the property and the status of the family unit. Shri Shah contended that the property should be treated as ancestral property, thus falling under the HUF status, while Shri Mittal argued that there was no HUF as the mother and son lived as tenants-in-common, not joint tenants. The legal representatives cited various legal precedents to support their arguments, including decisions from the Supreme Court and the Madras High Court.

After a thorough examination of the facts, legal provisions, and relevant case laws, the ITAT held that the widow mother and the son did not constitute an HUF during the period in question. The ITAT referred to the Hindu Women's Right to Property Act and Mulla's Hindu Law to determine the nature of the inheritance and the family status. It was concluded that the income from the property was rightly assessed as the individual income of Bhai Rajen until he married and formed a joint family with his wife.

The ITAT further analyzed the Supreme Court's decisions in similar cases and distinguished them from the present situation. It was emphasized that there was no past history of the property being owned by an HUF, and the absence of other coparceners supported the assessment of the income in the status of an individual. Additionally, the ITAT referred to a recent decision of the Madras High Court, affirming that the status of HUF would only apply upon the birth of a son in such circumstances.

In conclusion, the ITAT dismissed the appeal, upholding the assessment of the income as that of an individual rather than an HUF, based on the legal principles and precedents discussed during the proceedings.