9911796707
TMI Blog1978 (7) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... a HUF, consists of Radheshyam Agrawal and his two minor sons. Radheshyam Agrawal was adopted by Smt. Radhabai, widow of late Shri Radhakishan Agrawal, on August 11, 1948, by means of a registered adoption deed. Radhakishan Agrawal had executed a will, whereby he had permitted his widow to make the adoption after his death. House No. 175, at Andherdeo in Jabalpur, admittedly, was owned by and was the property of the assessee, i.e., the HUF. Shrimati Radhabai, the adoptive mother of Radheshyam Agrawal, was also a member of the HUF. The said house No. 175 was being used by Smt. Radhabai as her residence until the same was sold by Radheshyam on April 25, 1963, for a sum of Rs. 45,000. In the return of income for the assessment year 1964-65 for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the question relating to the proper construction of s. 54 of the Act raises a question of law and accordingly, it, has referred the above question for the decision of this court. The real question for our decision is whether the word " assessee used in s. 54 is applicable only to a living person and not to an artificial juridical person even though, for the purpose of the I.T. Act, the word assessee " as defined in s. 2(7) of the Act includes every person, who is a unit of assessment " and the definition of "person" in s. 2(31) of the Act is wide enough to include every artificial juridical person, including a HUF, a partnership firm, etc. In other words, even though for the purpose of the I.T. Act, a HUF or a partnership firm is a "unit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I.T. Act, which includes even a fictional person such as a HUF or a partnership firm, this meaning of the word " assessee " as defined in the Act should be cut down to mean only a living person for the purpose of s. 54 of the Act. It would be useful to remember that s. 2 of the Act, which contains the definitions, expressly says that the words used in the Act are to be construed according to these definitions, " unless the context otherwise requires ". The context in which the defined word occurs has, therefore, to be borne in mind when its meaning has to be found. Section 6 of the I.T. Act, 1961, shows that while the concept of " residence " in the case of an assessee, who is an individual, is the same as conveyed by the word " residenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of s. 22 of the Act. Some words occurring in s. 23 are similar to the significant words in s. 54, indicated earlier. These words in s. 23 are " in the occupation of the owner for the purpose of his own residence". It may be mentioned that ss. 22 and 23 of the I.T. Act, 1961 , correspond to sub-ss. (1) and (2), respectively, of s. 9 of the Indian I.T. Act, 1922. The decision on these provisions of the 1922 Act construing these words are, therefore, helpful in the present case. In Calcutta Stock Exchange Association Ltd., In re [1935] 3 ITR 105 (Cal), the word " residence " in the proviso to sub-s. (2) of s. 9 of the Indian I.T . Act, 1922, was construed by the Calcutta High Court in its simple and ordinary meaning signifying the place w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally keeps house and does business. The decisions of Chief Baron Kelly and Baron Huddleston in Calcutta Jute Mills Co. Ltd. v. Nicholson [1876] 1 TC 83 and Cesena Sulphur Co. Ltd. v. Nicholson [1876] 1 TC 88, now 30 years ago, involved the principle that a company resides for purposes of income-tax where its real business is carried on.' Moreover, it has been decided, that a company is a person who can reside within the meaning of the word 'reside'as used in the Income-tax Act and other statutes. But, in my opinion, a company can only 'reside' within that extended meaning of the term, when it resides for the purpose of carrying on business and it cannot reside apart from carrying on business. Thus, in both sections 4 and 42 of the Indian In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith which we are concerned, also supports the view that the word " assessee " used in s. 54 of the I.T. Act, 1961, refers only to living persons and not to fictional or artificial juridical persons also, which may be included within the definition of the word " assessee " contained in s. 2(7) of the Act. A Full Bench of the Kerala High Court in K. I. Viswambharan Brothers v. CIT [1973] 91 ITR 588 took the view that the benefit conferred by s. 54 of the I.T. Act, 1961, could not be given to a partnership firm, even though it was a unit of assessment for the purpose of the Act. That decision also indicates that fictional or artificial juridical persons are not to be treated as included within the scope of the word " assessee " used in s. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
