9911796707
TMI Blog1975 (8) TMI 62X X X X Extracts X X X X X X X X Extracts X X X X ..... atus as "Individual" and the assessments were also completed on him in that status. For the asst. yr. 1966-67 and for the subsequent assessment years upto 1971-72, the assessee declared his status as "HUF" in the return of income filed by him. In the relevant column of the return form, he also gave details of the members constituting the family. It was claimed before the ITO that in the earlier years his status was wrongly shown as that of an "Individual" as the business carried on by him was a business which was previously carried on by his father and that, consequently, it was an ancestral business which he had inherited. The ITO passed the order of assessment for the asst. yr. 1966-67 on 23rd March, 1971 taking the assessee's status as " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessments from 1966-67 to 1971-72. 4. Against the above finding of the ITO, the assessee against filed appeals before the AAC and contended that the ITO was wrong in taking the status as "Individual". The AAC agreed with the ITO s view that no evidence was brought on record to show that the business carried on by the assessee was an ancestral business which was previously carried on by the father. The AAC held that as the assessee was seeking a change in his status from the asst. yr. 1966-67 onwards, it was for the assessee to discharge the onus of showing that the status was really that of a "HUF". As no acceptable evidence was put forward by the assessee in support of that claim, the AAC held that the onus was not discharged and that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owner of that business and also declared his status as "Individual". In these circumstances, it was argued, the business clearly had an ancestral nucleus in its and the assessee should have been assessed in the status of "HUF". It was further argued that the mere fact that he wrongly declared his status as "Individual" for the asst. yrs. 1946-47 to 1965-66 and was also assessed in that status would not operate as res judicate as far as the subsequent assessments are concerned. 6. If the submissions made on behalf of the assessee were supported by any evidence, we would have had no difficulty at all in coming to the conclusion that the business was an ancestral one and that the assessee s status should have been taken as "HUF", on the stre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... continued by his widowed mother nor was any evidence produced to show that the business started by the assessee in 1945 was that same business. Neither Ramdhan nor the assessee s mother were said to have maintained any accounts relating to the business. Even the assessee, after commencement of business in 1945, has not maintained any accounts till now. If such accounts had been maintained, it might not have been difficult to trance the family nucleus if any in this business. Apart from mere assertions to the effect that the business is an old family business, no evidence has at all been brought on record to support it. As pointed out by the AAC, as the assessee has been assessed in the status of an "Individual" for a period of nearly twent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntention, he argued that a mere declaration of status in the return of income filed before the ITO will not constitute an unequivocal declaration of intention to throw the self-acquired property into the family hotch-potch. He, therefore, submitted that even the alternative contention raised on behalf of the assessee should be rejected. 9. In our view, the assessee is entitled to succeed on the alternative contention. As we have already pointed out, there is no evidence to show that the business carried on by the assessee from the asst. yrs. 1946-47 to 1965-66 was an ancestral business. In other words, that business has to be treated as the individual business of the assessee. However, in the return for the asst. yr. 1966-67 and in the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... maintained for this business for any of the years. The assessee sales the timber extracted by him both as logs and also as sawn timber. he owned a saw mill of his own but no truck, up to the asst. yr. 1969-70. For the asst. yrs. 1970-71 and 1971-72, besides the saw-mill, the assessee also acquired a truck. There is absolutely no indication given by the assessee of the extent of sales of logs and of sawn timber. Normally, in a business involving only sale of logs, even where a person does not own trucks for transportation of the logs, the net profit is being estimated at 10 per cent of the sales and the turnover is generally estimated at 2 times the lease money paid for the forest. In respect of sawn timber, where the assessee owns its own ..... X X X X Extracts X X X X X X X X Extracts X X X X
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