ADDITIONAL COMMISSIONER OF INCOME TAX Vs. RAM PRASAD

JUDGEMENT

(1.) WE have heard Sri Prakash Krishna, learned counsel for the Revenue, and Sri V.K. Rastogi, learned counsel for the respondents.

(2.) BRIEF facts of the reference which relate to asst. yrs. 1969 70 and 1970 71, inter alia, are that M/s Bhagwati Prasad Ram Sarup was an HUF, which was assessed as such for and up to the asst. yr. 1952 53. There was a partition in the joint family on 9th Nov., 1950, and a firm was formed with effect from the asst. year 1952 53. The firm has been assessed to tax from the said assessment year upto date. S/Sri Ram Sarup and Ram Prasad, who were real brothers, were the two partners of the firm having equal shares in the firm as constituted, on the partition of the family. Both S/Shri Ram Prasad and Ram Sarup were assessed to income tax for their asst. year 1956 57. For and up to the asst. year 1968 69 they were assessed as individuals and with effect from the year 1969 70 they were assessed as an HUF. However, the income on which they were assessed arose out of the assets, which were received, on the partition of the joint family and the assessments for all the years should have been made in the assessments of HUF. In connection with the asst. yr. 1964 65 the ITO received information that the partners had accounts in banks, which were not incorporated in the books of the firm. So far as Shri Ram Prasad is concerned he came up with the disclosure petition dt. 9th Aug., 1965, disclosing an income of Rs. 76,062, which had escaped assessment and requested that the same be assessed for asst. yrs. 1956 57 to 1964 65. As per that disclosure he had Rs. 43,919.99 at the end of the financial year 1953 54 which was outside the account books of the firm. Shri Ram Sarup did not make any disclosure petition. In this case, it was found that there were deposits in the bank in 1954 to the extent of Rs. 34,200 as under :

(3.) REVENUE , being aggrieved, moved reference application before the Tribunal, which was not allowed. Thereafter, being aggrieved, reference application was moved in this Court, whereupon following questions of law were framed :