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TMI Blog1980 (7) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... acter. For the assessment years 1971-72 and 1972-73, the assessee contended before the ITO that the sum of Rs. 14,523 received by him during the two relevant previous years by way of refund of annuity deposit did not belong to him but they belonged to the HUF of which he was the karta, by reason of the declaration made by him on August 12, 1970, and, consequently, the sum of Rs. 14,523 was not assessable in his hands. The ITO came to the conclusion that there was no provision in the I.T. Act enabling the assessee to make a transfer of the annuity deposit and the annuity deposit received by him by way of refund during the relevant previous year was assessable in his hands despite the declaration made by him on August 12, 1970. On appeal, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should be treated as income under s. 2(24)(viii) and hence when they were realised by the HUF they have to be treated as income from converted property and, consequently, the amounts received by the assessee by way of refund of annuity deposit had to be assessed as income in his hands by reason of s. 2(24)(viii) read with s. 64(2) of the I.T. Act, 1961. At the instance of the assessee, the following question of law has been referred to this court for opinion under s. 256(1) of the I.T. Act, 1961 : " Whether, on the facts and circumstances of the case, the sum of Rs. 14,825 received by the assessee by way of refund of annuity deposit during the relevant previous years ending April 13, 1971, and April 12, 1972, is assessable in his hands ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in that property and treats it as property of the family. Thus, when a separate property is converted into joint family property, it is a voluntary unilateral act without consideration in money or money's worth. This court in A. N. K. Rajamani Ammal v. CED [1972] 84 ITR 790 has pointed out that this unilateral act of a person by which he throws the self-acquired property into the common stock of the joint Hindu family is not a disposition within the meaning of Expln. 1 to s. 2(15) of the E.D. Act nor an extinguishment at the " expense of the deceased of a debt or other right ", within the meaning of Expln. 2 thereof. Since a transfer is a bilateral or multilateral act and throwing into the common stock of the joint Hindu family is a unilat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x. The contention of the revenue is that the annuity deposit as such had not been impressed with the character of HUF property and the right to receive annuity deposit alone had been impressed with the character of the property of HUF and what had been impressed with the character of HUF property was the right to receive the instalment and not the annuity deposit as such and in this view the refund of any instalment of annuity deposit should be treated as income from the converted property under s. 2(24)(viii) read with s. 64(2) of the I.T. Act, 1961, and, consequently, the amounts received by the assessee by way of refund of annuity deposit should be assessed as income in his hands. This court in the decision, CIT v. M. M. Muthiah [1977] 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erty by throwing it into the common stock of the family, the income from such converted property shall be deemed to arise to the individual and not to the family. The computation of the income of the individual who has converted his individual property into joint family property by throwing it into the common stock should be computed only in the manner provided under s. 64(2) and not in any other manner. By invoking s. 64(2), the declaration made by the assessee is construed as transfer of the converted property by the individual to the joint, family. The computation of the income of the individual from the converted property should also be done only in the manner provided under s. 64(2). The fiction created under s. 64(2) cannot have a res ..... X X X X Extracts X X X X X X X X Extracts X X X X
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