COMMISSIONER OF INCOME TAX Vs. KHIMJI TEJU KAYA

JUDGEMENT

(1.) THIS is a reference made by the Tribunal, Bombay Bench "B", under S. 66(1) of the Indian IT Act, 1922. Before setting down the question referred to us, a few facts may be stated :

(2.) IN this reference we are concerned with the asst. yrs. 1942 43 to 1947 48 and 1952 53 to 1958 59, the corresponding accounting periods being S.Y. 1997 to S.Y. 2002 and S.Y. 2007 to S.Y. 2013, respectively. There were two sets of appeals before the Tribunal, one set arising out of the original assessments and the other, against the re assessments made under S. 34 of the Indian IT Act, 1922, as a result of certain proceedings before the IT Investigation Commission. The quantum was not in dispute in the appeals and the short question that was agitated before the Tribunal and which arises for consideration in the reference before us was whether the income from the firm of M/s Teju Kaya & Co. pertaining to the share of Shri Khimji Teju Kaya was the individual income of the said Shri Khimji or the income of a HUF of which Shri Khimji Teju Kaya was the Karta. The assessee desired that the status should be accepted as an individual as against the Department's contention that the income should be clubbed with and assessed in the hands of the HUF of Shri Khimji Teju Kaya as its income.

(3.) FROM the years 1938 39 to 1943 44, the share income from this firm was being assessed in the hands of the HUF on the basis of the returns filed by the assessee, Khimji Teju Kaya, as its Karta. The income from the firm as well as other income from the properties were all shown as property of the family of which Khimji was the Karta. For the year 1943 44, however, there was a contention raised before the AAC in the appeal for the year which was to the effect that the income really belonged to the individual and not to the family. The AAC did not allow this ground to be taken in appeal. Returns for the years up to 1947 48 were originally filed showing the status as HUF. However, revised returns were filed for the years 1944 45 to 1947 48 claiming that the share income did not belong to the HUF but only to Khimji Teju Kaya, an individual. The contentions to this effect based on the provisions of Hindu law were made before the ITO but were rejected by the ITO. The matter was carried in appeal to the AAC where these contentions were repeated. In the memorandum of appeal before the AAC a will dated September 4, 1927, left by Rao Saheb Teju Kaya was referred to and the will was produced before the AAC. A copy of this will is annexed as annexure "F".