SHRIVALLABHDAS MODANI Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal, Indore Bench, has drawn up a statement of the case and referred to the High Court for decision the following questions of law :

(2.) FACTS of the case, as stated by the Tribunal, are as follows : Assessment year in question is 1974-75. Assessee Shrivallabhdas Modani, originally represented his HUF, consisting of himself, his wife, sons and unmarried daughters (for reference "the bigger HUF"). In 1962 there was a partition of the family property between Shrivallabhdas Modani and his sons. After the said partition Shrivallabhdas Modani, his wife and unmarried daughters constituted an HUF, hereinafter described as " the smaller HUF". After partition in the year 1962 the assessee, Shrivallabhdas, representing the smaller HUF, invested the property received on partition, in the firm, M/s. Shrivallabhdas Govinddas. The share of profits received by the assessee, Shrivallabhdas, was assessed in the status of an HUF for some time. The assessee, Shrivallabhdas Modani, also owned some self-acquired property in respect of which he was assessed in the status of an "individual".

(3.) ON appeal, the AAC modified the assessment order holding that after partition between Shrivallabhdas and his sons in the year 1962, Shrivallabhdas, his wife and unmarried daughters constituted a smaller HUF and the income of the firm, M/s. Shrivallabhdas Govinddas, should have been assessed in the hands of the smaller HUF consisting of Shrivallabhdas Modani, his wife and unmarried daughters. Accordingly, he held that the income earned by the smaller HUF could not be included in the income of Shrivallabhdas Modani earned by him in his individual capacity. ON the second question regarding the throwing of the property into the common stock, the AAC upheld the finding of the ITO that after the complete partition in 1962, the coparcenary consisting of Shrivallabhdas Modani and his sons had come to an end and the assessee could not blend any property received by him in succession with the property which was held earlier by the bigger HUF.