1966 (5) TMI 1 - HC - Income Tax

Individual income - Assessee contend that properties of Gopala Shetty were bequeathed under the will to the family consisting of his wife, Rama Bai, and his seven children, and that the assessment should be made on that basis

Summary

Issues: Interpretation of a will regarding the devolution of properties to a Hindu undivided family and the correct assessment of income for specific assessment years.

Analysis:

The judgment pertains to a reference under section 66(1) of the Income-tax Act concerning the interpretation of a will made by a deceased individual, Gopala Shetty, in 1958. The primary issue revolves around whether the properties bequeathed in the will devolved on a Hindu undivided family or solely to the wife of the deceased, Rama Bai, along with the correct assessment of income for the relevant assessment years.

The Income-tax Officer initially assessed the properties based on the interpretation that the bequest was to the wife, Rama Bai, and not to the family. However, the Appellate Tribunal later ruled in favor of the family, leading to a reference being made to the High Court. The two questions referred for decision were whether the properties devolved on the family or solely on the wife, and whether the assessments should have been made on the wife as an individual for the respective assessment years.

The High Court analyzed the provisions of the will, which unequivocally stated that the properties were bequeathed to the wife, Rama Bai. The court emphasized that while the will imposed obligations on the wife to maintain the family, educate the children, and manage the estate for the family's well-being, these obligations did not diminish the clear bequest made to the wife. The obligations were deemed enforceable rights of the family members against the wife.

The court concluded that the bequest under the will was in favor of the wife, Rama Bai, subject to the obligations outlined in the will. Therefore, the properties did not devolve on the Hindu undivided family as contended. Consequently, the assessments were deemed to have been correctly made on Rama Bai as an individual for the specified assessment years.

In light of the above analysis, the High Court answered both questions in favor of the Commissioner, affirming that the properties did not devolve on the family but were bequeathed to the wife, Rama Bai, with enforceable obligations. As a result, the assessments on Rama Bai as an individual were deemed appropriate for the relevant assessment years, and no costs were awarded in the circumstances.