BAJRANG LAL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) A Hindu undivided family consisted of Bajrang Lal, his wife, four sons, one daughter and mother. This Hindu undivided family owned various assets. On the first day of the previous year relevant to the assessment year 1959-60, there was a partial partition in this family. The business assets of the firm, Phool Chand Bajrang Lal, were partitioned. The assets of this firm were divided equally between Bajrang Lal, his four sons and his wife. The firm was converted into a partnership firm in which the wife did not join as a partner. Thereafter the only partners were Bajrang Lal and his two major sons, the two minor sons were admitted to the benefits of the partnership. With regard to the rest of the assets, the original Hindu undivided family continued.

(2.) IN his individual assessment, Bajrang Lal claimed that the share which he received on partition was liable to be assessed in his hands in the status of a Hindu undivided family consisting of himself, his widowed mother and unmarried daughter. The INcome-tax Officer, however, held that Bajrang Lal was liable to be assessed in the status of an individual. This view was affirmed on appeal. Bajrang Lal, the assessee, took the dispute to the Tribunal. The Tribunal held that in view of the Supreme Court decision in Gowli Buddanna's case [1966] 60 ITR 293 (SC) the position is that if a sole coparcener has received an ancestral property on partition or otherwise, he is entitled to the status of a Hindu undivided family provided he or she represents a family as understood under the personal law of Hindus and is capable, in nature or in law, to add a coparcener to the family, who will be entitled to claim partition. The Tribunal went on to hold that the first condition is admittedly satisfied. Bajrang Lal with his widowed mother and unmarried daughter constituted a family as understood under the personal law of Hindus.

(3.) AT the instance of the assessee this court directed the Tribunal to refer the following questions also for the opinion of this court: