COMMISSIONER OF INCOME TAX Vs. KANHAIYA LAL LATE

JUDGEMENT

(1.) THIS is a reference under Section 66(1) of the Indian Income-tax Act, 1922. Kanhaiya Lal is the assessee. He was assessed as an individual for three assessment years, 1956-57, 1957-58 and 1958-59. He was also the head of a Hindu undivided family consisting of himself and his three sons. On November 19, 1955, Kanhaiya Lal executed a deed of declaration. In that document he declared that certain property detailed in the deed formed part of the joint family property. The Income-tax: Officer took the view that that declaration in the deed dated November 19, 1955, was ineffective, and the property in question was property of Kanhaiya Lal as an individual. He was, therefore, assessed on that basis. THIS decision was upheld in appeal by the Appellate Assistant Commissioner. But the assessee succeeded before the Tribunal. The Tribunal held that the property in question belonged to the Hindu undivided family, and that it could not be assessed in the hands of Kanhaiya Lal as an individual. At the request of the Commissioner of Income-tax, U. P., the Appellate Tribunal has referred the following two questions to this court:

(2.) IN R. Subramania Iyer v. Commissioner of INcome-tax, 1955 28 ITR 352, it was held by the Madras High Court that there is nothing to prevent a father from impressing upon any self-acquired property belonging to him, the character of joint family property. No formalities are necessary in order to bring this about, This decision of the Madras High Court was noticed by the Supreme Court in Commissioner of INcome-tax v. M.R. Stremann, [1965] 56 I.T.R. 62 (S.C.).