ADDITIONAL COMMISSIONER OF INCOME TAX Vs. VENKATARAMAN G

JUDGEMENT

(1.) THIS reference relates to two assessment years 1965-66 and 1966-67. The assessee is a Hindu. On 2nd January, 1960, the assessee married a German Christian lady in the Church of the Sacred Heart according to the rites and ceremonies of the Roman Catholics. The assessee has a daughter by name Christine. The assessee filed the returns in the status of an individual for the two assessment years 1965-66 and 1966-67. Later, relying on the principles enunciated by the Supreme Court in its judgment in N.V. Narendranath v. Commissioner of Wealth-tax , that to constitute a Hindu undivided family there need not be two male members, the assessee filed revised returns for these two assessment years in the status of a Hindu undivided family consisting of himself, his wife and his unmarried daughter. In the original return filed in the status of an individual he returned an income of Rs. 21,930 for the assessment year 1965-66. For the assessment year 1966-67 in the original return filed in the status of an individual, he had disclosed a total income of Rs. 24,006 only. But, in the revised return, he disclosed an income of Rs. 9,930 for the assessment year 1965-66 and Rs. 12,006 for the assessment year 1966-67. The difference in the total income in the revised returns was on account of the fact that the assessee, in the returns filed as Hindu undivided family, excluded the remuneration of Rs. 12,000 each year received by him as director of M/s. V. Vijayakumar Mills Ltd. on the contention that it constituted his individual income. The Income-tax Officer accepted the assessee's claim to be assessed in the status of Hindu undivided family and made the assessments accordingly. But he declined to exclude the sum of Rs. 12,000 from the income of the family. However, when the assessee preferred appeals to the Appellate Assistant Commissioner of Income-tax challenging the correctness of the assessment in respect of certain matters, the Appellate Assistant Commissioner took the view that the assessee could not be treated as a Hindu undivided family and assessed as such and he could be assessed only in the status of an individual. Against this order of the Appellate Assistant Commissioner, the assessee preferred two appeals referable to the two assessment years in question and the Tribunal, by its order dated Jane 14, 1973, held that the assessee should be assessed in the status of a Hindu undivided family and accordingly allowed the appeals as far as this aspect is concerned. It is the correctness of this conclusion of the Tribunal that is challenged by the revenue, on the Additional Commissioner of Income-tax, Madras-2, applying for and obtaining a reference of the following question for the opinion of this court :

(2.) WE may straightaway mention that the Tribunal upheld the conten-tion of the assessee on the basis of the decision of this court in R. Sridkaran v. Commissioner of WEalth-tax [1969] 73 ITR 360 (Mad) and also relying upon Explanation (b) to Section 2 of the Hindu Succession Act, 1956, and the corresponding provisions contained in the Hindu Marriage Act, 1955, the Hindu Adoptions and Maintenance Act, 1956, and the Hindu Minority and Guardianship Act, 1956. WE may mention that before us also the learned counsel for the assessee very strongly relied upon the observations of this court in R. Sridharan v. Commissioner of WEalth-tax [1969] 73 ITR 360 (Mad) referred to above and the Supreme Court on appeal arising out of the same judgment, namely, Commissioner of WEalth-tax v. R. Sridharan and the statutory provisions referred to already and did not put forward any other ground to support the conclusion of the Tribunal and, therefore, we proceed to consider only this question and no other.

(3.) AFTER stating the above general proposition, the Supreme Court proceeded to state (page 443) :