MAHADEO PRASAD RAIS Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THIS is a reference under Section 66 of the Indian Income-tax Act, 1922. The assessee is a Hindu undivided family consisting of six members. Mahadeo Prasad is the karta of the family. Other members of the family are Mahadeo Prasad's major son, Bithai Das, two minor sons, Naunit Priya Das and Ashtbhuji Das, Mahadeo Prasad's wife, Smt. Kastoori Devi, and his widowed mother, Smt. Kastoori Devi. The assessment years are 1956-57, 1957-58 and 1958-59.

(2.) UP to the assessment year 1948-49, the assessee was being assessed as a Hindu undivided family. For the assessment year 1949-50 and subsequent years, the assessee claimed partition in the family. The assessee's case has all along been that there was partition in the family in the year 1948. The family carried on business. Some of the assets of the assessee were in the books of the family. Several items were outside the books. Items in the books of the assessee were divided on June 30, 1948. On July 7, 1948, a partnership firm took over the assets, which had been divided on June 30, 1948. The assets outside the books were also divided on October 30, 1948, and were invested in the partnership firm. The result is that the entire business of the family was taken over by the new firm. According to the assessee, it had no income during the three previous years corresponding to the three assessment years.

(3.) IT may be pointed out that the Tribunal accepted the position that the zamindari and house properties and Government securities of the value of Rs. 18,24,000 had been divided among the members of the family before the three relevant assessment years. That is why question No. 1 has been confined to items besides those .three items.