COMMISSIONER OF INCOME TAX Vs. MIR MOHAMED ALI

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal, Madras Bench, has referred the following question for the opinion of this court, pursuant to the direction of this court made in T.C.P. Nos. 9 and 10 of 1971 dated March 2, 1972 :

(2.) A business in the name of M. M. Ali Motor Service was being carried on by Mir Madhi Hussain, father of the assessee, till his death and thereafter by the assessee himself. In the assessments for the assessment years 1956-57 and 1957-58, the assessee claimed that one-eighth of the income from that business was diverted by an overriding title to his mother, who was an heir under the Mohamedan Law, entitled to one-eighth share in the estate of the deceased, Mir Madhi Hussain. This claim was accepted by the department. At the stage of the assessment year 1958-59, and for succeeding years, the stand of the assessee was that a firm consisting of his mother, Sakina Begum, the erstwhile employee called Hussain Baksh and the assessee himself had taken over the business with effect from April 1, 1957, and that the said firm filed a separate return of income and application for registration under Section 26A of the Indian I.T. Act, 1922. It has been held that the said firm was not a genuine firm and that matter has become final because this court had confirmed the view of the'.Tribunal that the said firm was not a genuine firm.

(3.) THE penalties levied; by the IAC were set aside by the Tribunal. Hence, the reference in question.