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TMI Blog1958 (10) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr. Amarchand's death and the amounts paid to his estate were ₹ 37,847, ₹ 43,162, ₹ 34,899, ₹ 13,402 and ₹ 32,523. The Department sought to tax these realisations as income in respect of the work done by Mr. Amarchand prior to his death. These amounts were assessed in the hands of an entity styled as the heirs and legal representatives of late Mr. Amarchand N. Shroff and the status of that entity was described to be that of a Hindu undivided family. The matter was carried to the Tribunal and the two members of the Tribunal took divergent views on certain aspects of the same, but they were agreed that the income in question could not be assessed as income of the assessee, i.e., the heirs and legal representatives of late Mr. Amarchand Shroff . The Judicial Member took the view that it could not by any stretch of imagination be said that the receipts were the income of the heirs assessable as their income and he held that the amounts could not be assessed as income of the assessee-heirs and he concluded in favour of the assessees. The Accountant Member stated in his order that what the Department should have done was that they should have asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lication to the matter. As to the proper and correct entity to be taxed, the Tribunal accepted the contention of the assessees, and according to the Tribunal that entity was the Hindu undivided family consisting of the two brothers and their mother. It was observed by the Tribunal that it was the Hindu undivided family who had received the outstandings from the partnership firm of solicitors. The Tribunal also reiterated what had been stated in the earlier appeal that in the hands of the Hindu undivided family the income could not be brought to tax, being of a capital nature. The matter comes before us on this Reference at the instance of the Commissioner and the question that we are called upon to determine is: Whether on the facts and in the circumstances of the case, the sums of ₹ 37,847, ₹ 43,162, ₹ 34,899, ₹ 13,402 and ₹ 32,523 were assessable to income-tax in the hands of the assessee 'Amarchand N. Shroff by his legal heirs and representatives' in the five respective years under reference? The matter has been argued before us by Mr. Joshi with his usual fairness. Although Mr. Joshi has not conceded any point, he has very fair ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im plicit in the word tax that it is a tax on the income of the deceased person. So far, we are in agreement with Mr. Joshi. The tax, of course, is income-tax and it can only be on the income of the deceased person. But the difficulty of Mr. Joshi starts immediately one begins to proceed henceforth. The plain meaning of the expression used in sub-section (1), viz., tax of deceased person which we must read as tax on the income of a deceased person postulates that the income was the income of the deceased person. Therefore, what cannot be said to be the income of a deceased person is outside the purview of this section, which is the only provision in the Income-tax Act which deals with the income of a person who dies without paying income-tax in respect of the same. Faced with this difficulty, learned counsel sought to derive support from the words at the end of the section, viz., or any tax which would have been payable by him under this Act if he had not died . Now, these words have to be read in their own context and the context clearly is of the income of a deceased person earned before his death. Therefore, here again the argument has to be thrown back from where it st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be regarded as a capital receipt. Therefore, on a plain reading of section 24B, we see nothing in its language which permits of that section being invoked in favour of the revenue. We shall now turn to the authorities on the subject which have been cited before us by Mr. Joshi and see if there is anything in these decisions which supports a contrary view. In Alien Murray v. Treheame (Inspector of Taxes) [1938] 6 ITR 172 a sum of money was payable under a service agreement on the final termination of service of the employee and in lieu of a pension a sum was payable. A sum of 10,000 was paid to the executors of the will of the deceased employee who died while holding his office. It was held that the amount was properly chargeable to the executors to the same extent as it would have been chargeable to the deceased if he had been alive. Now, there is one observation in the judgment of Lawrence, J., in that case on which counsel has tried to rely and that observation is: They might suppose anything and the sub-section only refers to the one supposition-namely, that the deceased had not died-and gives no other guidance. That concept is present in our section 24B in expr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Mr. Joshi any further. One more decision cited by Mr. Joshi is Kamdar, In re [1946] 14 ITR 10 . In that case nothing turned on section 24B. Mr. Joshi has relied on certain general observations made in the judgment in that case and which relate to the nature of income. Now, we are in respectful agreement with the observations of Kama, J., and Chagla, J. as they then were, but the observations have little bearing on the issue before us and it is not necessary for us to discuss in this judgment the general nature and incidents of income in the context of tax law. Another aspect of this matter presented by learned counsel for the Revenue is founded on the concept that receipts after death did not change the character of the income. We have already made reference to this point and it is not necessary for us to discuss the same. We only mention it to note the argument sought to be founded on this concept. In the view we take of the matter, it is not necessary to discuss the question about the Hindu undivided family which was argued before the Tribunal. The whole argument turns principally on the application of section 24B and the view we take of the matter is in favour of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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