PREM CHAND JAIN,J. - (1.) THE Income-tax Appellate Tribunal, Chandigarh Bench, has referred the following questions of law for our opinion : " (i) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in holding that the income of the assessee from the firm, M/s. Rameshwar Dass Hari Shankar, Ahmedabad, was not includible in the taxable income of Ghansham Dass, individual ? (ii) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that by purporting to bequeath the total amounts due to her immediately prior to her death from the firm, M/s. Rameshwar Dass Hari Shankar, Ahmedabad, to the joint Hindu family of Shri Ghansham Dass, the testatrix had bequeathed the property jointly to Shri Ghansham Dass, his wife and his daughter in equal shares ? (iii) If the answer to question No. (ii) is in the negative, whether the bequest made by the testatrix in respect of the amount due to her from the firm M/s. Rameshwar Dass Hari Shankar, Ahmedabad, the joint family property of the HUF consisting of Shri Ghansham Dass, his wife and his daughter ? (iv) If the answer to question No. (ii) is in the negative, whether the bequest made by the testatrix in respect of the amount due to her from the firm, M/s. Rameshwar Dass Hari Shankar, Ahmedabad, the property of the individual, Shri Ghansham Dass ?"
(2.) THE assessee is an individual having, according to his return, share income from three partnership firms, two namely, M/s. Rameshwar Dass Ram Saran Dass and M/s. Kirori Mal Devi Sahai, carrying on business at Delhi, and one, namely, M/s. Bharat Metal Industries, carrying on business at Bhiwani. The assessee's share in the said three firm's profits was 17%, 25% and 15%, respectively. The relevant previous years, as contemplated under Section 3 (1) (f) of the I. T. Act (hereinafter referred to as "the Act"), ended on March 31, 1969, and March 31, 1970, respectively, in respect of the said sources of income. The assessment was completed by the ITO on January 24, 1970, at a total income of Rs. 28,363 as against the income of Rs. 18,913 returned by the assessee for the assessment year 1969-70, and at a total income of Rs. 69,260 for the assessment year 1970-71, in the status of an individual. The assessee was also a partner in a fourth firm, namely, M/s. Rameshwar Dass Hari Shankar, which was carrying on business at Ahmedabad. In the profits of the said fourth firm, the assessee's sjiare was 25%. The accounting year of the said Ahmedabad firm was from November 16, 1967, to July 26, 1968. The assessee's share income from the Ahmedabad firm for the said previous year ending on July 26, 1968, was Rs. 3,542. In respect of this share income of Rs. 3,542, the HUF, M/s. Ghausham Dass Gaja Nand of Bhiwani, filed a return for the assessment, year commencing on April 1, 1969. The ITO clubbed this share income with the assessee's share income from the other three partnership firms and completed the assessment accordingly, vide his order dated January 24, 1970 (annexure "a"), relating to the assessment year commencing on April 1, 1969. For the assessment year 1970-71, the total income assessed by the ITO, to which the dispute in respect of this assessment year before the Tribunal related, was Rs. 31,765. Copy of the order of the ITO relating to the assessment year 1970-71 is annex. "b".
(3.) ON appeal, the AAC excluded the amounts of Rs. 3,542 and Rs. 31,765 from the assessee's taxable income for the assessment years under consideration.;