1982 (3) TMI 130 - AT - Income Tax

Summary

Issues:
1. Whether the questions raised in the reference application are questions of law arising from the Tribunal's order.
2. Validity of the partial partition and its impact on the assessment of income.
3. Assessment made by the ITO in different capacities and subsequent cancellations.
4. Justification for the reassessment under sections 147 and 148.
5. Appeal against the AAC's order and cross objection challenging the initiation of proceedings under section 147(a).

Issue 1:
The CIT sought to refer questions of law arising from the Tribunal's order, contending they were valid for reference to the High Court. However, the assessee's counsel opposed, citing a previous decision accepted by the Revenue. The Tribunal found no referable question of law and dismissed the reference application.

Issue 2:
The case involved a partial partition affecting the business assets of a Hindu Undivided Family (HUF) and the subsequent assessment of income shares from various firms. The Tribunal upheld the partial partition's validity, emphasizing the overriding title created by Hindu Law principles and parties' actions, leading to individual assessments based on the memorandum of partition.

Issue 3:
The ITO's assessments in different capacities, including as an association of persons and an unregistered firm, were made and subsequently canceled. The Tribunal found the reassessments under sections 147 and 148 to be invalid, as the income was assessable in severalty based on the overriding title created by the partial partition.

Issue 4:
The revenue justified the reassessment under sections 147 and 148, arguing that the partial partition did not create an overriding title. However, the Tribunal, relying on a previous judgment and the principles of Hindu Law, held that the reassessments were unjustified and canceled them.

Issue 5:
Challenges against the AAC's order and the initiation of proceedings under section 147(a) were raised in appeals and cross-objections. The Tribunal, in line with a previous decision, found the reassessments in different capacities to be unlawful and canceled them, upholding the individual assessments based on the partial partition.

In conclusion, the Tribunal dismissed the reference application, upheld the validity of the partial partition, canceled the invalid reassessments made by the ITO in different capacities, and found the initiation of proceedings under section 147(a) to be without lawful jurisdiction. The decision was based on the overriding title created by the partial partition and the principles of Hindu Law, ensuring individual assessments based on the shares allocated in the memorandum of partition.