COMMISSIONER OF INCOME TAX Vs. P VISALAKSHI

JUDGEMENT

(1.) THE two questions referred to the court for opinion are whether, on the facts and in the circumstances of the case, the Appellate Tribunal is justified in law in holding that the income of the estate of the deceased person subsequent to the date of death is assessable under section 168 in the hands of the executor and whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that in view of the application of section 168 there is no scope for application of section 26 and that the estate for the purpose of assess ment under section 168 is to be considered as a single estate Without any right of co-ownership ? Smt.P. Visalakshiand Smt. P. Savithri, two sisters, it is said inherited the estate of K. Periyaswamy (who died intestate on August 28, 1975), along with four others including their mother, P. Balammal, their grandmother (mother of their father), Smt. K. Meenakshi, and two other sisters. Periyaswamy owned a building at Karur along with his partner, Sri K. Ponnuswamy, in equal shares. He was also a partner in the firms Amarjothi Fabrics and Amarjothi Traders, which were carrying on business in textiles. Periyaswamy retired from the partnership and the money due to him was held by the firms as deposit.

(2.) HE received interest thereon. Thus the estate left by him on his death was the half-share in the property in Karur and the deposit with the firms. His widow, Balammal, filed a return disclosing Rs. 6, 976 as income from house property and Rs. 27, 426 as income by way of interest and claimed that she administered the estate of the deceased K. Periyaswamy. The Income-tax Officer considered that on the death of Periyaswamy, his heirs including the two daughters above-named succeeded to the property under section 8 of the Hindu Succession Act, that they took the property as tenants-in-common as provided under section 19(b) of the Hindu Succession Act and, consequently, were entitled to 1/6th of the income and each was liable to be assessed on such 1/6th portion of the income from the estate.

(3.) IT is important to note that the words used are 'estate of a deceased person shall be chargeable to tax in the hands of the executor'. The provision in section 168(1) does not, therefore, seem to leave any discretion to the income-tax authorities in respect of assessing the income of the estate of a deceased person to tax. Such income is to be taxed in the hands of the executor. The word 'executor' is not to be understood in the restricted sense of the term because by the Explanation it has been given an extended meaning to include an administrator or other person administering the estate of a deceased person.