COMMISSIONER OF INCOME TAX Vs. HARSHVADAN MANGALDAS
LAWS(GJH)-1988-3-7
HIGH COURT OF GUJARAT
Decided on March 22,1988

COMMISSIONER OF INCOME TAX Appellant
VERSUS
HARSHVADAN MANGALDAS Respondents

JUDGEMENT

S.B.MAJMUDAR,J. - (1.)THIS reference at the instance of the Revenue poses for our consideration the following three questions :
" (1) Whether, on the facts and circumstances of the case, the Tribunal was right in law in holding that, at the end of the partitions, dated December 28, 1964, December 29, 1967, March 26, 1971 and March 9, 1972, there survived an HUF consisting of the assessee and his daughter ? (2) Whether, on the facts and circumstances of the case, the movable and immovable properties that, as a result of the said partitions, fall to the share of the assessee constituted not his separate property but the joint property of the said HUF ? (3) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the income earned from the aforesaid properties during the year under consideration was taxable in the hands of the HUF comprised of the assessee and his daughter ?"
Which have been referred to us by the Tribunal under S. 256(1) of the IT Act.
(2.)A few relevant facts leading to this reference deserve to be noted at the outset. The concerned assessment year is 1972 73. The respondent assessee is an individual. The financial year is the previous year. His total income was assessed by the ITO as per his order at Rs. 2,65,050 as rounded off as against the total income of Rs. 2,55,040 declared as per the original return dated August 29, 1972. The assessee later revised the return on June 6, 1974, and declared that whereas income amounting to Rs. 1,97,364 was taxable in his hands as an individual, the amount of Rs. 1,24,622 was taxable in his hands as Karta of the HUF which comprised by himself and his daughter. The total of the said two amounts maintained in the revised returns came to Rs.
,21,986 as against the original total figure of Rs. 2,55,040. Regarding the amount of Rs. 1,24,622, the assessee claimed that the said income arose from assets which had fallen to his share on four partitions effected on December 28, 1964, December 29, 1967, March 26, 1971, and March 9, 1972. The said partitions of joint property belonging to the HUF comprised of the assessee, his wife, his son and his daughter had taken place as between the assessee and his son's 1/3rd share had been allocated to the assessee, his wife and his son, respectively, at the time of each partition. 3. The ITO took the view that whatever property the assessee received as a result of the partial partition would constitute his separate property and that his daughter, Aditi, would have no right therein.

(3.)THE assessee went up in appeal to the AAC. The AAC, following the principles laid down by the Supreme Court and various High Courts in the decisions referred to before him, held that the assessee was entitled to claim the status of a HUF in respect of the properties received by him on partial partition and that the ITO was not justified in including the income received by the appellant on partial partition in the individual income of the appellant assessee.
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