ADDITIONAL COMMISSIONER OF INCOME TAX Vs. P DURGAMMA

JUDGEMENT

(1.) Under directions from this court under section 256 (2) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), the Income-tax Appellate Tribunal referred the following question of law for the consideration of this court :

(2.) This case has a chequered history. Disputes which arose in 1947 between members of a joint family were the subject-matter of consideration in several courts and the matter eventually went right up to the Supreme Court. The question which basically fell for consideration was whether the business carried on in the plying of motor buses by Samudrala Patrudu, his wife, Durgamma, claimed that the business was the individual business of her husband and that under a will executed by her deceased husband, she was entitled to carry on the business in her own right. Durgamma was the second wife of Samudrala Patrudu. The first wife of and also his brothers set up a contrary claim to the effect that the business related to the joint family of which Samudrala Patrudu was the "karta." It is not necessary to set out in detail the decisions of various courts : it is enough to mention that eventually the Supreme Court held that the business was that of the joint family of which Samudrala Patrudu was the "karta". The Supreme Court further held that Durgamma had no interest whatever in that business, although she had advanced some moneys to her husband to enable him to carry on the business. The Supreme Court held that the claim of Durgamma could only be for repayment of the moneys advanced by her with interest and that she had no interest in the business as such. In the civil suiz filed in the court of the Subordinate Judge, Visakhapatnam, there was preliminary decree don 27/03/1950. Thereafter, Durgamma was appointed as a receiver for the purpose of carrying on business.

(3.) In connection with the income-tax assessments relating to the assessment years 1962-63 to 1968-69, the question regarding the assessment of the income derived from the plying of motor buses had come up for consideration. The assessments were made on Durgamma as an individual on the income derived from the business. There were appeals against the assessments. When appeals were filed before the Tribunal, the Tribunal cancelled those assessments holding that the income from the business could not be assessed in the hands of Durgamma in her individual capacity. The Tribunal held that the business belonged to a joint family of which Samudrala Patrudu was the "karta" and, therefore, the income was liable to be assessed in the hands of the joint family. The order of the Income-tax Appellate Tribunal cancelling the assessments made in the individual hands of Durgarmma for the assessment years 1962-63 to 1968-69 is not part of the record, Neither standing counsel for the Department nor learned counsel for the assessee was able to place the said order before us. We are referring to this fact for the limited purpose of pointing out that the grounds upon which the Tribunal came to the conclusion that the income is assessable in the hands of the joint family are not clear from the records We can hazard a guess that obviously the Tribunal noticed the judgment of the Supreme Court when the appeals came up before it for disposal and consistent with the decision of the Supreme Court, the assessments made in the hands of Durgamma in her individual capacity were quashed.