1990 (5) TMI 62 - AT - Income Tax

Summary

Issues:
Assessment of income from gifted property as individual income or Hindu Undivided Family (HUF) income.

Analysis:
The appeals were against the orders of the A.A.C. for the assessment years 1983-84 and 1984-85. The assessee, an individual, received gifts after marriage and claimed them as HUF income. The ITO assessed the interest income in the hands of the assessee, considering it tax planning. The A.A.C. upheld this decision. The assessee appealed to the Tribunal, citing a Madras High Court decision that gifts assumed joint family property character. The Departmental Representative argued that without an existing HUF, gifts cannot become HUF property, citing the Supreme Court's decision in Surjit Lal Chhabda. The Tribunal considered the facts and the Madras High Court decision, holding that the gifted property should be assessed as HUF income, not individual income, following the donor's intention. The appeals were allowed, directing the exclusion of this income from the individual assessee's income for both years.