COMMISSIONER OF INCOME TAX Vs. S BALAKRISHNAN

JUDGEMENT

(1.) IN this tax case reference under section 256(1) of the INcome-tax Act, 1961, at the instance of the Revenue, the following question of law has been referred to this court for its opinion."Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is correct in law in holding that the income from the properties which devolved on the assessee on the death of his mother, cannot be included in the assessment of the individual for the year 1975-76 ?" * Briefly stated, the circumstances giving rise to this reference are as follows : The assessee is an individual. IN the course of finalising the assessment for the accounting period ending on March 1, 1975, relevant to the assessment year 1975-76, the INcome-tax Officer sought to include, in the assessment of the assessee, the income from a property known as Kottai House and some agricultural lands.

(2.) THE assessee maintained that that income belonged to the assessee in the status of a Hindu undivided family and was, therefore, not includible in his individual hands. THE Income-tax Officer negatived the stand of the assessee and included the income from the property referred to above in the hands of the assessee in his individual assessment for the year in question. On appeal, however, the Appellate Assistant Commissioner directed the exclusion of the income from properties referred to above from the hands of the assessee individual and this was also affirmed by the Tribunal.

(3.) THUS, on a careful consideration of the provisions in the settlement deed, it is seen that the income from the properties could be assessed only in the hands of the Hindu undivided family of the assessee and not in his individual hands. We may, however, observe that we ought not to be understood as having subscribed to the view of the Tribunal as regards the theory of revival of the ancestral character of the properties in terms of the settlement deed or the transitional shedding of the ancestral character owing to the settlement deed. THUS, on a due consideration of the provisions in the settlement deed, we are of the view that the Tribunal was right in its conclusion that the income from sub-item of item I of the properties which devolved on the assessee on the death of his mother cannot be included in the assessment of the individual for the year 1975-76. We, therefore, answer the question referred to us in the affirmative and against the Revenue.