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TMI Blog1989 (4) TMI 109X X X X Extracts X X X X X X X X Extracts X X X X ..... f the deceased and the other return was for the period 28-2-1981 to 27-10-1981, i.e. from the date of death of the deceased to the Diwali Day. The incomes which were earned and returned for the period 7-10-1980 to 7-2-1981 were as follow :-- 1. 50% share of profit in the firm M/s Jhutalal Mahabir Prasad Loss Rs. 4,201 2. Dividend income 97,860 --------------- Total 93,659 --------------- For the second period commencing on 28-2-1981 and ending on 27-10-1981 the following incomes were shown :-- 1. Interest income Rs. 30,976 2. Dividend Income 84,032 3. Long term capital gain 93,117 ---------------- 1,98,125 ---------------- The assessee claimed that whereas the income for the period belonged to the deceased and so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 51 ITR 345 (SC) 4. The aforesaid concurrent findings of the authorities below are assailed by the assessee's learned counsel as erroneous in law and it is stated that the income which never belonged to the deceased and which never accrued and arose to him could never be brought to tax in his hands through his legal representative u/s. 159. The income which accrues after the date of death of the deceased belonged to the executor of the will of the deceased and it was he who had to be taxed in respect of that separately. There is no justification in law to tax the deceased through his legal representative in respect of income which did not accrue and arise to him or was received by him during his life-time. None of the authorities which are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o in the case of CIT v. Amarchand N. Shroff. Their Lordships of the Hon'ble Supreme Court have clarified in the aforesaid judgment that if the receipts were after the end of the previous year, the legal representative could not be taxed with regard to them for even though the income was earned by the deceased, it was not received by him during the previous year in which he was alive. The fiction created by section 24B of the Indian Income-tax Act, 1922 did not cover the situation were receipts were received after the expiry of the previous year in question in which the death took place, to their Lordships : "Section 24B did not authorise the levy of tax on receipts by the legal representative of a deceased person in the years of assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income of the living person, after his death, could be brought to tax in the hands of the legal representatives of the death. (iii) That some income which though accrued and arose to the deceased while he was alive, could not be received by him during his lifetime, could yet be brought to tax in his hands through his legal representatives, if the income was received during the previous year in which he died, even though the receipt might be after his death. The last provision is on account of the fiction created by section 24B of the Indian Income-tax Act 1922, which extended the legal personality of the deceased to the entire previous year in which he died. 8. Later on, to complete the history of evolution of the law on the point, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... crued and arose to the deceased during his lifetime ; whereas section 168 deals with the taxation of the income which accrues and arises to the estate of the deceased after his death. Section 159(1), which is more or less charging section in this regard, reads as below :-- 159(1) "Where a person sides, his legal representative shall be liable to pay any sum which the deceased would have been liable to pay if he had not died, in the like manner and to the same extent as the deceased." From the portion italicised above it is clear that u/s. 159 an assessment can be made only with regard to that income in respect of which the deceased would have been liable to pay tax if he had not died. The deceased would naturally not be liable to pay ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s request was that we should direct the authorities below to analyse the income from the above single. There appears to us to be some substance in the above argument of the learned departmental representative. Having laid down the principle as above, we set aside the orders of the authorities below and restore the matter back to the file of the ITO with the direction that he will analyse each item of income with a view of ascertain as to which part of it accrued and arose to the deceased during his lifetime, and as to what is the income which accrued or arose after the death of the deceased, not to him, but to the executor and to bring to tax separately the two total incomes u/s. 159 and u/s. 168. With this direction we restore the matter b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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