R.C. MALPANI Vs. COMMISSIONER OF INCOME TAX
LAWS(GAU)-1994-3-20
HIGH COURT OF GAUHATI
Decided on March 26,1994

R.C. MALPANI Appellant
VERSUS
COMMISSIONER OF INCOME TAX Respondents




JUDGEMENT

- (1.)AT the instance of this court, the Tribunal has referred the question for the opinion of this court.
(2.)FOR the assessment year 1970 -71, the Assessing Officer completed the assessment of the assessee in the status of a Hindu undivided family. The assessment was completed under section 143(3) of the Income Tax Act, 1961, and the return was filed showing an income of Rs. 17,000 on May 31, 1971. In the assessment order, the Income Tax Officer considered the income of the assessee from Hindusthan Saw mill and from contract works. In respect of income from house property, the Income Tax Officer mentioned that the assessee had shown Rs. 9,500 as income from other sources. This related to the rent in respect of a hangar (godown) let out out to the supply department. The income was computed at Rs, 14,583. There was another property stated to be in the name if the wife of the karta, Smt. Ganga Devi. The Assessing Officer mentioned that the assessee -Hindu undivided family consisted of the karta, Smt. Ganga Devi Malpani, mother of the karta, and Smt. Ganga (sic) devi Malpani, wife of the karta. There were also four minor sons and one minor daughter at the relevant time. The Income Tax Officer mentioned that the family inherited a plot of land located within the Jorhat Municipality, on which a three -storeyed building was constructed in 1967 and completed in 1969. He noted that the entire building together with the land was gifted by the karta and his mother, Smt. Ganga Devi, to the wife of the karta, Smt. Ganga Devi by a registered deed of gift on March 27, 1969. The value of the gifted property was shown as Rs. 1,000. However, the Assessing Officer found that the annual rent immediately after transfer was shown by the done at Rs. 14,400. He pointed out that for the assessment years 1968 -69 and 1969 -70, Rs. 60,000 was added to the cost of construction as made by the assessee. The Income Tax Officer was of the opinion that the gift was prejudicial to the interest of the five minor children in the family and the father had no power to make a gift of ancestral immovable property to the wife the prejudice of the minors. According to the Income Tax Officer, the gift was totally void.
(3.)THE assessee preferred an appeal before the Appellate Assistant Commissioner of Income Tax, Jorhat Range, Jorhat. The Appellate Assistant Commissioner also dismissed the appeal. Being aggrieved the assessee preferred a second appeal before the Income Tax Tribunal. The Department also preferred an appeal on some other grounds. The Appellate Tribunal, after hearing both sides, held that the gift was void and the property continued to belong to the Hindu undivided family and the income was rightly included in the hands of the Hindu undivided family. Thereafter, the assessee filed an application for referring certain questions of law. However, the Appellate Tribunal refused to refer the question under section 256(1). Situated thus, the petitioner filed C.R. Nos. 15 to 20(M) of 1977 and 68(M) of 1977. This court court, after hearing the parties, directed the Appellate Tribunal to submit a statement with the following question : Whether the Tribunal was right in holding that the gift of immovable property was void and the income therefrom was assessable in the hands of the assessee -Hindu undivided family ?
Heard Dr. A. K. Saraf, learned counsel for the assessee, and Mr. D. K. Talukdar, learned Standing counsel for the Income Tax Department.



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