GRANCE S GEORGE Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE petitioner is an assessee to income-tax. THE respondent is the Revenue. We are concerned with the assessment year 1977-78. In this original petition, filed under Section 256(2) of the Income-tax Act, the petitioner prays that the Income-tax Appellate Tribunal may be directed to refer certain questions of law formulated in para 4 of the original petition for the decision of this court. THEy are as follows :

(2.) THE petitioner-firm was constituted under a deed of partnership dated January 28, 1975. THE assessment was completed in the status of an " association of persons ". THE income assessed comprised of income from property. THE dispute is with regard to the status. According to the petitioner/assessee, the share income is to be computed in the case of each individual and the assessment should not have been made as an association of persons. THE firm was constituted on January 28, 1975. It had three partners and six minors admitted to the benefits of the partnership. THE land was purchased in the names of one of the partners and three minors. A building was constructed on this land. THE income was returned by the assessee claiming the status as a firm. THE registration applied for the year 1976-77 was rejected. THE Income-tax Officer also found that there was no genuine firm in existence. THE status assigned was that of an association of persons. THE petitioner maintained that the building belonged to the three adults and six minors. It was pleaded that the investment of these persons in the property is ascertainable. So the share of each person in the property and the income therefrom are definite and, therefore, the assessment is not to be made in the status of an association of persons but the share income is to be computed in the case of each person. THE case of the Revenue was that there was no specification in any of the documents relied on by the assessee regarding the extent of the right of each person. THE materials available only go to show that the property was jointly owned by the partners. It is not possible to ascertain the share of each of the co-owners. So, the assignment of the status as an association of persons is justified. THE Appellate Tribunal, on an evaluation of the relevant facts held that the only conclusion that can be drawn is that a certain piece of land was purchased in the names of four persons and a building was constructed thereon with common funds without any indication as to the extent of contribution by each party. It was held that the property is co-ownership property where the share of each co-owner is not definite or ascertainable. THE status assigned as an association of persons is proper. THE petition filed by the assessee under Section 256(1) of the Income-tax Act to refer certain questions of law for the decision of this court was dismissed by order dated May 22, 1984. It was held by the Tribunal that the finding recorded by it is only one of fact and no referable question of law arises out of the order of the Appellate Tribunal. THEreafter, the assessee has filed this original petition under Section 256(2) of the Income-tax Act.