JEETMAL NAGRI Vs. COMMISSIONER OF WEALTH TAX

JUDGEMENT

(1.) BY this reference under Section 27(1) of the Wealth-tax Act, 1957 (hereinafter referred to as " the Act"), the Income-tax Appellate Tribunal, Indore Bench, has referred the following question of law to this court for its opinion :

(2.) THE material facts giving rise to this reference as set out in the statement of the case, briefly, are as follows : For the assessment year 1975-76, the assessee filed his return of net wealth in the status of HUF and the assessment was completed under Section 16(1) of the Act on September 9, 1975. THE Commissioner, on scrutiny of the assessment record of the assessee, noticed that the assessee was the karta of an HUF, M/s. Nathmal Jeetmal, till Diwali 1965, when partition was effected amongst the assessee, his wife and two sons and that after the partition the assessee continued to carry on business in his individual capacity. THE Commissioner was, therefore, of the opinion that the assessment of the assessee in the status of an HUF was erroneous in so far as it was prejudicial to the interest of the Revenue. He, accordingly, issued a show-cause notice under Section 25(2) of of the Act to the assessee. In reply to the show-cause notice, the assessee contended that the status of the assessee continued to be that of a HUF even after partition. THE Commissioner, however, held that after the partition the assessee was holding the property in his individual capacity and hence his claim that he should be continued to be assessed in the status of an HUF was not tenable. Aggrieved by the order passed by the Commissioner the assessee preferred an appeal before the Tribunal. THE Tribunal held that in view of the fact that there had been a partition between the assessee, his sons and the wife, the Commissioner was jusified in holding that the status of the assessee was that of an individual. Aggrieved by the order passed by the Tribunal, the assessee submitted an application for making a reference to this court and it is at the instance of the assessee that the aforesaid question of law has been referred to this court for its opinion.