S.N.SAHAY, J. - (1.) THIS judgment governs both References Nos. 4 and 5 of 1987.
(2.) THE following two questions have been referred under Section 256 of the Income -tax Act, 1961 : '(1) Whether, on the facts and circumstances of the case, out of the amount invested in the construction of the house, any amount can be said to have been invested out of the Hindu undivided family funds ? (2) Whether, on the basis of the above investments, any portion of the income from the house can be said to be the income of the Hindu undivided family liable to be excluded from the income of the applicant ?' The assessee, Sri J. P. Varma, is an Assistant Engineer in the Under -Ground Water Division, Lucknow. He filed a return for the assessment year 1977 -78 declaring a total income of Rs. 9,370. In part III of the return, he declared that his wife had constructed a house bearing No. 22, Chandralok, for about Rs. 1,10,000 out of loans, advances and savings received from her father and others. The assessee's wife, Smt. Kamlesh Kumari, also filed herindividual return. Regarding the investment in the construction of the house property, the assessee relied upon the contention raised by his wife in her case that it included a loan of Rs. 82,120 taken from the assessee. According to the assessee, the sources for the alleged loan of Rs. 82,120 were as follows : Rs. (i) Encashment of NationalSavings Certificates by the assessee 31,420 (ii) National. SavingsCertificates encashed by the assessee's wife. 22,120 (iii) National SavingsCertificates encashed by Km. Suman Khare 15,480 (iv) Non -refundable advancefrom G. P. F. 10,000 (v) Sale of scooter. 3,100 82,120
(3.) THE assessee claimed that the total of items Nos. 1, 2 and 3 above amounting to Rs. 69,020 represented the funds of the Hindu undivided family. His case is that he obtained a succession certificate for Rs. 9,137 in respect of the Post Office Savings Bank Account and F.D.R. for Rs. 14,000 standing in his father's name who died in April, 1961, and received a sum of Rs. 16,000 contributed in equal shares by his four brothers under a family settlement. This amount of Rs. 39,137 was invested from time to time in purchasing the National Savings Certificates mentioned above.;