COMMISSIONER OF INCOME TAX Vs. TALWAR O N

JUDGEMENT

(1.) WHERE the annual instalment of principal and interest payable in respect of an annuity deposit made under Chap. XXII -A of the INCOME TAX ACT, 1961, is received by a person other than the one who actually made the deposit, would the whole or any part of the annual instalment received be liable to income -tax ? That is the question raised in this income -tax reference.

(2.) SHRI O.N. Talwar, the respondent -assessee, was the Karta of an HUF (HUF) known as O. N. Talwar & Sons. The family was disrupted w.e.f. July 16, 1966, by a partition deed dated July 22, 1966. Thereafter, O. N. Talwar,was assessed as an individual for the asst. yrs. 1967 -68 and 1968 - 69 for which the previous years were the financial years 1966 -67 and 1967 -68, respectively. These two assessment years form the subject -matter of the two references now before us.

(3.) THE AAC, however, observes :