RADHA GAJAPATHI RAJU Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) IN these tax cases under section 256(1) of the INcome-tax Act, 1961 (hereinafter referred to as "the Act"), at the instance of the assessee, the following common question of law in respect of the assessment year 1970-71 to 1972-73 has been referred to this court for its opinion :

(2.) THE assessee, along with her husband, P. V. Gajapathi Raju, and two minor daughters, was a partner in Admiralty Flats Motel Shri P. V. Gajapathi Raju was a partner in the said motel, representing the Hindu undivided family consisting of his wife, his two minor daughters and himself. For the assessment year 1970-71, the assessee filed a return disclosing her share income from the said Admiralty Flats Motel at Rs. 24,735 and in Part IV of the return, she had given the names of the other three person as the other partners thereof, each being entitled to a one-fourth share. Similarly, returns were also filed for the assessment years 1971-72 and 1972-73, disclosing her share income at Rs. 29,085 and Rs. 13,609, respectively. Originally, the Income-tax Officer finalised the assessments for these three assessment years, determining the assessee's income tentatively as nil" on the ground that, as per the order dated January 31, 1972, in relation to the assessment year 1969-70 in the case of P. V. Gajapathi Raju, the Karta of the Hindu undivided family, there was no genuine partnership in existence and the entire income of Admiralty Flats Motel was assessable in the hands of the Hindu undivided family. Nevertheless, the Income-tax Officer, in the assessment orders for the three assessment years in question, had also stated that the assessments would be revised, if necessary, as per the decision of the appellate authorities (presumably with reference to the order dated January 31, 1972, referred to earlier) and the correct income would be adopted and that in such an event, the share income of the husband and the minor children of the assessee would also be considered for inclusion in the assessee's hands, if that was advantageous to the Revenue.

(3.) WE may now make a reference to the relevant provisions of the Act. Section 155(1) of the Act runs as follows :