COMMISSIONER OF INCOME TAX Vs. NAGARATHNAMMA SMT

JUDGEMENT

(1.) THIS is a reference made at the instance of the Commissioner under section 256(1) of the Income-tax Act, 1996. the question of law referred forour opinion are :

(2.) ONE Ramaswamy Setty was a partner in two firms, namely, M/s. T. Seenappasetty Bros. & Co. and M/s. T. satyanarayana RIce & Oil Mills. He held shares in the said two firms in his capacity as the karta of the Hindu undivided family consisting of himself, his wife and three minor sons. The income of his Hindu undivided family. Ramaswamy Setty died on October 28, 1958, after the coming into force of the Hindu Succession Act 1956. Since Ramaswamy Setty died instestate, his share in the joint family property devolved on his wife, daughter and three sons in equal shares. The share which devolved on the heirs of Ramaswamy Setty is stated to be 4/17th. For the assessment year 1960-61, the question arose whether the 4/17th share of income that accrued from the two partnership firms was also assessable as the income of the Hindu undivided family. The Income-tax Appellate Tribunal, Madras Bench, has held that the 4/17th share of Ramaswamy Setty devolved by succession on his window, daughter and three sons in equal shares under section 6 of the Hindu Succession Act and,therefore, the 4/17th share of the income is not liable to be assessed in the hands of the HIndu undivided family. The Commissioner of Income-tax sought a reference for the opinion of this court and, accordingly, the Tribunal has referred the above questions for our opinion.

(3.) WE answer the questions referred for our decision in the affirmatie and in favour of the assessee. The Commissioner will pay the costs of the assessee. Advocate's fee Rs. 250.