(1.) BY this reference under Section 256(1) of the Income -tax Act, 1961, at the instance of the Revenue, the Income -tax Appellate Tribunal has referred the following question of law to this court for opinion : 'Whether, on the facts and in the circumstances of the case, share income in the name of Smt. Jasotiben Ramchand Lalwani from Vapson Products was assessable in the status of individual or a Hindu undivided family ?'
(2.) THIS reference pertains to the assessment year 1978 -79. As is evident from the question itself, the controversy is whether the assessee, Smt. Jasotiben Ramchand Lalwani, was assessable in the status of individual or a Hindu undivided family in respect of the share income from the registered firm, Vapson Products. The material facts giving' rise to this controversy are as follows :
(3.) WE have heard Mr. B. V. Jhaveri, learned counsel for the assessee. We have also heard Mr. P. S. Jetley, learned counsel for the Revenue, who pointed out to us that the decisions of the Gujarat High Court in CWT v. Harshadlal Manilal : [1974]97ITR86(Guj) and CIT v. Dr. Babubhai Mansukhbhai : [1977]108ITR417(Guj) , which were followed by the Special Bench of the Tribunal in ITO v. Shri S. R. Kirloskar (HVF) , have since been reversed by the Supreme Court in CWT v. Chander Sen : [1986]161ITR370(SC) . It was contended that in view of the above decision of the Supreme Court, the amount standing to the credit of Shri Ramchand Lal -wani, who died intestate on September 7, 1967, devolved in equal shares on his two major sons and his widow, the assessee herein, in their individual capacity and not on any Hindu undivided family. This amount, according to him, cannot be treated as the property of the Hindu undivided family. Learned counsel further submits that Smt. Jasotiben joined as a partner of the newly constituted firm with effect from September 8, 1967, in her individual capacity and the amount standing to the credit of the deceased Ramchand Lalwani in his capital account in the firm was transferred to her account. According to him, the property which devolved on the heirs of Ramchand Lalwani never acquired the character of Hindu undivided family property.