VISHNUKANTHAM CHETTY Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE assessee was the Hindu undivided family which consisted of Virupaksha Chettiar and his two sons, Gopal Padmanabha and Vishnukantham. THE vilasam adopted for the photographic business was that of the younger son, Vishnukantham, but it was managed by the elder son Gopal Padmanabha. THE father does not appear to have had anything to do with the business, though admittedly the family was undivided. the Department and the Tribunal declined to accept the plea of Gopala Padmanabha, that the father carried on a brokers business on his own; but it was apparently not the case of any one that the father in any way participated in the business carried on by the sons. Virupaksha died in August, 1946. On 11th October, 1944, one Singaravelu executed a deed of mortgage for Rs. 7,750 in favour of Virupaksha. Rs. 5,000 was realised on 8th August, 1947; and this was shown as a credit in the capital account of the business.

(2.) IN proceedings under section 34 of the INcome-tax Act, the Department held that this item of Rs. 7,750 was liable to be assessed as income during the accounting year ending with 31st March, 1945, "from sources not disclosed to the Department." The Tribunal sustained the addition. the question that the Tribunal referred under section 66(1) of the Act was "whether there was any material for assessing the sum of Rs. 7,750 in the hands of the assessee".

(3.) WE answer the question referred to us in the negative and in favour of the assessee. The assessee will be entitled to the costs of this reference. Counsels fee Rs. 250.