COMMISSIONER OF INCOME TAX Vs. GATTUPALLI A

JUDGEMENT

(1.) THE following question has been referred to us under section 256(1) of the Income-tax Act :

(2.) ON further appeal, however, the Tribunal took a different view. The Tribunal was of the view that import quota rights were only one of the properties left behind by Sri A. Gattupalli and that this property along with other properties left by the deceased was partitioned between the mother and four sons under a deed of a partition. It was held that no business was carried on as such by the said body of individuals. The Tribunal referred to the fact that the Government rejected the request of Mrs. Gattupalli for issuance of separate entitlements in the names of herself and her our sons, but held that, the said rejection by the Government has no relevance to the question of status. It held that, inasmuch as the deed of partition clearly stated that each of the co-owners was entitled to a 1/5th share in the quota rights left behind by the deceased, the income arising by exploitation of such rights cannot be taxed, in the hands of the body of individuals, but should be taxed, if at all, as the individual income of the five individuals. The Tribunal was also of the opinion that there was diversion by superior or overriding title, namely the deed of partition, which specified and separated the share of each of five heirs of the deceased. The correctness of the said view is question in this reference.