COMMISSIONER OF INCOME TAX Vs. M P JAYARAM

JUDGEMENT

(1.) This is a reference made under Section 256(1) of the Income-Tax Act, by the Revenue to decide the following question of law: "Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the income from business of running two cinema theaters by M.P. Jayaram (major HUF) and the three heirs of Puttaswamy was not liable to be assessed in the status of AOP:"

(2.) The facts of the case are, that there was a Joint Hindu Family, of which, one M.R. Puttaswamy was the Kartha. This Joint Family had two cinema theatres - one at Hassan and the other at Arsikera, besides other properties. M.R. Puttaswamy died on 12.7.1968 leaving his two sons as his legal heirs (M.P. Jayaram and M.P. Basavaraj) and an unmarried daughter M.P. Padmavathi. The undivided share of Puttawamy devolved upon his two sons and unmarried daughter, being class I heirs, and his share was 4/13th. The remaining 9/1.3th share continued with the HUF, namely, M.P. Jayaram (major HUF).

(3.) After the death of Puttaswamy, the Cinema business has continued as before. In the assessment year for 1970-71, the Income-Tax Officer brought the Cinema business income to tax holding that M.P. Jayaram (Major HUF) M.P. Jayaram (Individual) M.P. Basavaraj (Individual) and M.P. Padmavathi (Individual) constituted an association of persons.