KAPIL MOHAN MAJ Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) IN these references under S. 256(1) of the INCOME TAX ACT, 1961 (for short, "the Act"), pertaining to the asst. yrs. 1971 -72 to 1975 -76 and 1977 -78, at the instance of the assessee, the following questions of law have been referred for the opinion of this Court : For asst. yrs. 1971 -72 to 1974 -75 :

(2.) THE assessee is the executor of the estate of the late Shri N.N. Mohan. The late Shri N.N. Mohan had deposited a sum of Rs. 1,57,250 under the Annuity Deposit Scheme under Chapter XXII -A of the Act, which, along with interest was refundable in ten equal instalments under S. 280D of the Act. Shri N.N. Mohan having died on 15th July 1969, the repayment of instalments of annuity along with interest, amounting to Rs. 19,656 and Rs. 11,586, were received by the assessee as the executor of his estate in each of the years, relevant to the asst. yrs. 1971 -72 to 1975 -76 and 1977 -78, respectively.

(3.) ON the other hand, Mr. P.N. Monga, learned counsel for the assessee, has contended that the said decision requires reconsideration because it is based on another decision of this Court in CIT vs. O.N. Talwar (1980) 17 CTR (Del) 228 : (1980) 123 ITR 80 (Del) : TC 38R.820, which has no application to a case like the present one. He sought to distinguish the decision in O.N. Talwar's case (supra) on the facts on the ground that in that case the assessee was a Karta of the HUF and prior to the partition of this HUF he had made certain annuity deposits on behalf of the HUF as Karta. After the partition of the family, he received his share of the repayment of annuity deposits as an erstwhile member of the family and on these facts this Court held that the assessee was a "depositor" to whom the annuity was due to be repaid and, therefore, the receipt of instalments of the annuity by a person, as a Karta of an erstwhile family, was a receipt by the "depositor" within the meaning of S. 280D of the Act. He has also urged that under the charging S. 2(24)(viii) of the Act what is included in the definition of income is the annuity due or the commuted value of any annuity paid to a "depositor" under S. 280D and not the repayment to any person other than the depositor and, therefore, the repayment of instalments of annuity to an executor cannot be treated as income. He, thus, asserts that we should not adopt the earlier view taken by this Court in the case of the assessee himself and instead the matter may be referred to a larger Bench for reconsideration.