RAGHUNATHDAS KAKANI Vs. ADDITIONAL COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) BY this reference under Section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as " the Act "), the Income-tax Appellate Tribunal, Indore, has referred the following question of law for the opinion of this court :

(2.) THE facts of the case, in brief, are as follows : THE assessment relates to the assessment year 1969-70, the previous year being the financial year 1968-69. THE assessee was Ramnarayan Kakani who died on November 20, 1968. He was a broker. THE legal representative of the deceased filed two returns, one up to the death disclosing an income of Rs. 30,380 and another return from November 21, 1968, to March 31, 1969, declaring an income of Rs. 15,613. THE ITO applied the provisions of Section 159(1) of the Act and held that the amount of Rs. 15,613 was assessable in the hands of the legal representative and assessed it by clubbing it with the income of the deceased up to the date of death. THE assessee, i.e., the legal representative, went in appeal against the order of the ITO. THE AAC held that, on the facts of this case, Section 168(3) of the Act was applicable and two separate assessments will have to be made and he, therefore, directed that the sum of Rs. 15,613 shall be deleted from the assessment of the assessee. THE department preferred an appeal before the Income-tax Appellate Tribunal, THE Tribunal allowed the appeal, set aside the order of the AAC and restored the order of the ITO. On the application of the assessee, the Tribunal has made this reference.

(3.) HE submitted that as Dr. Raghunath was granted probate by a competent court and that he was otherwise administering the estate of the deceased person, he was an executor and the provisions of Section 168 of the Act were attracted to the present case. According to the learned counsel for the assessee, the provisions of Sections 159 and 168 of the Act have to be read together and in all cases income of the deceased received by him up to his death and income of the deceased received by the executor after his death have to be separately assessed. According to him, the income of the deceased up to his death has to be assessed under the provisions of Section 159 of the Act and the income of the deceased realised after his death has to be assessed under Section 168(3) of the Act. The learned counsel for the department contended that in the present case the brokerage received by the son, Dr. Raghunath, after the death of the deceased, cannot be said to be the income of the estate of the deceased and the provisions of Section 168 of the Act were not attracted and the Tribunal was fully justified in holding that the matter was governed by Section 159 of the Act.