LAWS(MAD)-1981-4-37

SATYENDRA KUMAR Vs. COMMISSIONER OF INCOME TAX

Decided On April 01, 1981
SATYENDRA KUMAR Appellant
V/S
COMMISSIONER OF INCOME-TAX, MADRAS Respondents

JUDGEMENT

(1.) THE assessee in theses Income-tax references is one Satyendra Kumar, son of Appa Rao. Shyamalambal is the mother of Appa Rao and the paternal grandmother of the assessee. This lady had funds of her own. She gave these funds to Appa Rao with the intention that they should be used for the benefit of the entire family. With the funds thus entered into various other transactions. In course of time, Appa Rao acquired properties in his name as well as in the names of others, utilising the money derived from the business and from properties acquired therefrom. After some time, disputes arose in the family as to these properties and businesses. THE disputes were referred to the arbitration of two members of the Madras bar named as joint arbitrators. THE arbitrators gave their award on June 9, 1955. THE award was filed in this court and a decree in terms of the award was passed by Balakrishna Iyer J., by his order dated December 19, 1956, in O.P.No. 202 of 1956. Under the terms of the award as entered in the decree, the properties which were acquired with the funds provided by Shyamalambal to Appa Rao were divided by metes and bounds and allotted to all the individual members of the family. Under the scheme of division the assessee got as and for his share 60 acres of land in Kollur Village, Ponneri Taluk, and a plot of vacant land in the City of Madras at Vepery. THE assessee is married and has got children.

(2.) ON the facts aforesaid, the question arose in the assessments of the assessee for 1968-69 and 1969-70 whether the assessee had to be dealt with as an individual or as the karta of an HUF in respect of the income from his properties and business. The ITO took the view that although the assessee got a share of properties on a partition effected by arbitrators under an award which was made into a decree of court, the properties divided and allotted under that award could not be held to be joint family properties. The officer was prepared to concede to some extent, that the properties were jointly acquired by Appa Rao, the assessee and Appa Rao's other sons, but, in his opinion, that would only make them joint properties and not joint family properties, so that on partition what the assessee got for his share was only his own separate property. The ITO accordingly assessed the assessee in the status of an individual.

(3.) THE legal position is summed up in the following passage in Mayne's Hindu Law, 11th Edn., as follows: