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TMI Blog1984 (8) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... n below : (i) Shri Laxmi Satyanarayana Flour, Rice and Oil Mill, Hanuman Temple Road, Khammam Town, bearing Municipal No. 5-7-91 to 99 (8-15-5) in which he held 35 per cent share. (ii) House bearing Municipal Door No. 5-7-88 to 91 (8-15-4) situated at Hanuman Temple Road, Khammain. (iii) A plot of 200 sq. yards at Pumpwell Road, Khammam. (iv) A plot of 300 sq. yards at Pumpwell Road, Khammam. (v) two plots of agricultural lands each measuring 2 acres and 20 guntas situated at Venkatagiri Road, Khammam. 3. After the death of Shri A. Radhakrishnamurthy, his creditors filed suits in Sub-Court as well as in the District Munsiff's Court, Khammam, for realisation of debts due to them and obtained decrees against his legal representatives-daughters. The full list of 22 suits filed against his legal representatives after his death and the execution petitions, which were also filed for realisation of the decretal amounts, was furnished as Schedule I to this order. As can be seen from the Schedule I, the total or the decree debts obtained against the estate of late A. Radhakrishnamurthy in the hands of his legal representatives-daughters amounted to Rs. 3,66,292.06. In O.S. No. 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against Shri M. Narasimha Rao, the Advocate-Receiver appointed by Sub-Court, Khammam. Unfortunately, Shri Narasimha Rao died and did not file any returns in pursuance of the said notice. Shri K. Krishnamachari, the Advocate-Receiver, appointed as mentioned above in the previous paras, filed two returns dated 25-6-1981 purported to be on behalf of the two daughters who were the legal representatives of late A. Radhakrishnamurthy. On 7-1-1982, notice under section 142(1) of the Act was issued to the Advocate-Receiver, Shri K. Krishnamachari, posting the case on 15-1-1982. Again the case was posted to 29-1-1982, on which date the authorised representative of the Receiver, viz., Shri V. Krishnamurthy, appeared and requested for an adjournment till 4-2-1982. On 4-2-1982, a return was filed showing nil income. In the covering letter which accompanied that return, it was mentioned that no income was admitted since two returns were filed on behalf of the legal representatives of late A. Radhakrishnamurthy. The ITO completed the assessment under section 144, read with section 168, of the Act by means of his assessment order dated 19-2-1982. 5. According to him, the estate of late A. Radha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be taxed for capital gains and the assessment framed against the Receiver computing capital gains in his hands is quite illegal. The learned Commissioner (Appeals), while accepting the argument thus advanced on behalf of the Receiver, held as follows : " The income from the estate therefore, belonged to the legal heirs and not to the Receiver. The Receiver was appointed by the Court for the specific purpose of satisfying the claims of the judgment creditors. This was merely an application of income under the court orders ; otherwise the title to the properties continued to remain with the legal heirs and it was only for a limited purpose that the Receiver was charged with the duty to realise the estate and to disburse the amounts to the creditors." It was also contended before the learned Commissioner (Appeals) that whatever income that accrued at the time of the former Receiver (M. Narasimha Rao), was not liable to be assessed in the hands of the present Receiver. Reliance was placed upon the two Allahabad High Court judgments reported in Prem Narain Agarwal v. ITO [1966] 61 ITR 57 and Gauri Shanker Sahi v, State of U.P. [1970] 77 ITR 827. This argument or objection wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... administering the estate of the deceased. The question of an executor administering the estate of deceased person would arise only if such an executor was appointed by the terms of a will left behind by the deceased by which the testator ordained the executor to take over his properties, administer them and to discharge the debts due from him. In this it is pertinent to note the wordings of section 168, which is as follows : " (1) Subject as hereinafter provided, the income of the estate of a deceased person shall be chargeable to tax in the hands of the executor,--- (a) if there is only one executor, then, as if the executor were an individual ; or (b) if there are more executors than one, then, as if the executors were an association of persons ; and for the purposes of this Act, the executor shall be deemed to be resident or non-resident according as the deceased person was a resident or non-resident during the previous year in which his death took place. (2) The assessment of an executor under this section shall be made separately from any assessment that may be made on him in respect of his own income. (3) Separate assessments shall be made under this section on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Code of Civil Procedure, 1908]. Simply because some suits were filed against legal representatives, that by itself does not prevent the succession of the assets by the legal representatives of late A. Radhakrishnamurthy. There cannot be any vacuum in the case of devolution. In our case the devolution cannot be kept in abeyance from the date of death of late A. Radhakrishnamurthy till the date of obtaining decrees by his several creditors. Further, all the creditors are only simple money-creditors but did not acquire any right or interest whatsoever in the properties held by A. Radhakrishnamurthy prior to his death. Therefore, as all the creditors filed the suits making the two daughters of A. Radhakrishnamurthy as defendants and as all the decrees were obtained only against the estate of A. Radhakrishnamurthy in the hands of the two daughters and as Shri M. Narasimha Rao, Receiver, was appointed only to take possession of the properties, realise the benefits and to deposit the net profits, thus, derived by him into Court in O.S. No. 56 of 1976, Sub-Court, Khammam, it cannot be said that the said Receiver, Shri M. Narasimha Rao, was in any way administering the estate of the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S 15/77 21-1-1980 Pendi Kalinga Reddy 15. 30/79 in OS 21/79 22-8-1979 Goli Somaiah 16. 40/79 in OS 226/78 14-11-1979 Mallachervu Dhanamma 17. 42/79 in OS 250/78 14-11-1979 Chidara Peda Bhadraiah 18. 47/79 in OS 25/79 4-12-1979 Badri A.A. Samajam 19. 33/79 in OS 56/78 25-9-1979 Divvela Suryaprakasha Rao 20. 60/79 in OS Pendli Abbaiah 21. 62/79 Suggala Dhanalakshmi 22. 71/79 in OS 105/77 28-11-1979 Pendli Venkateswarlu --------------------------------------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------------------------------------- Field by Adv. Amount of E.P. Rs. Amount of rebateble distribution 70 per cent --------------------------------------------------------------------------------------------------------------------------------------------------- APR 30,808.89 21,566.28 APR 19,215.00 13,450.28 APR 50,633.00 35,450.10 APR 41,750.40 29,225.28 APR 9,752,33 6,826.63 APR 9,667.68 6,767.37 SNM 17,384.00 12,168.80 SNM 7,727.30 5,409.11 SNM 8,014.82 5,610.37 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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