1979 (3) TMI 97 - AT - Income Tax

Summary

Issues:
1. Ownership of property at Whites Road, Madras-14.
2. Tax liability on the entire income from the property.

Detailed Analysis:

Issue 1: Ownership of property at Whites Road, Madras-14
The appellant declared 50% of the income from the property as belonging to his mother, Mrs. A.V. Patro, while claiming the remaining 50% for himself based on a legal opinion. However, the Income Tax Officer (ITO) disagreed, asserting that the appellant had consistently offered the property income in his hands for assessment and had mortgaged the property for repairs, indicating full ownership. The Appellate Assistant Commissioner (AAC) upheld the ITO's decision, emphasizing that the will of the appellant's father, A.V. Patro, established the appellant as the sole owner of the property. The appellant argued that the will was unprobated and should be disregarded, claiming entitlement to only 50% of the property under the Hindu Succession Act, 1956. The Departmental Representative contended that the will had been acted upon for over two decades, establishing the appellant's ownership. The Tribunal noted the lack of conclusive evidence regarding ownership and remanded the matter to the AAC for further examination, directing a comprehensive review of all relevant documents and evidence to determine ownership conclusively.

Issue 2: Tax liability on the entire income from the property
The appellant contended that as the property was ancestral, forming part of his Hindu Undivided Family (HUF), no individual tax liability should arise. Additionally, he argued that only 50% of the income should be assessed in his hands due to his mother's purported ownership share. The Departmental Representative highlighted the appellant's consistent reporting of the entire income in previous years and argued against disregarding the will to avoid tax liability. The Tribunal acknowledged the appellant's new claim regarding tax liability and directed a fresh assessment by the AAC, considering all relevant evidence and materials to determine the accurate tax liability, emphasizing the need for a comprehensive review of the appellant's claims and supporting evidence.

In conclusion, the Tribunal partially allowed the appeal, setting aside the AAC's decision and instructing a thorough reassessment by the AAC to establish ownership and tax liability conclusively based on all available evidence and legal provisions.