COMMISSIONER OF INCOME TAX Vs. A GHOSH

JUDGEMENT

(1.) In this reference under Section 256(1), Income-tax Act, 1961, at the instance of the Revenue, the following questions have been referred for the opinion of the court :

(2.) The relevant facts may be stated hereunder. The assessee, Mrs. A. Ghosh, is the sole executrix and the sole residuary legatee under the last will and testament dated May 5, 1964, of her husband, Dr. Ghosh, who had died on December 12, 1965. The probate of the will was granted to the assesseee on October 6, 1966, on her giving an undertaking to the Probate Commissioner that she would render a full account of the administration of the estate within six months or within the extended time granted by the Probate Commissioner. The Income-tax Officer found that the amounts representing the income from the estate of her deceased husband, of which the assessee was appointed as sole executrix, were deposited in her personal account during the previour years relevant to the assessment years 1967-68, 1968-69 and 1969-70, The Income-tax Officer included the said incomes for the assessment of income-tax of the assessee for the said assessment years on the footing that the assessee as sole executrix had distributed the said income to herself as sole legatee. And on such inclusion of the said income from the estate under Section 168(4), Income-tax Act, 1961, the Income-tax Officer completed the assessment for the said three assessment years.

(3.) The assessee preferred appeals before the Appellate Assistant Commissioner who took a different view. It was held that Section 168(4), Income-tax Act, 1961, would not be attracted until the administration of the estate was completed. The Appellate Assistant Commissioner held that in the present case, the administration of the estate was not completed before the end of the relevant previous years since the estate duty which was a first charge on the estate still remained unpaid and that the mere fact that the income from the estate was credited by the executrix to her personal bank account would not amount to distribution of income of the estate to herself as a sole legatee. In that view of the matter, the Income-tax Officer was directed by the Appellate Assistant Commissioner to exclude the amounts representing income from the estate from the individual assessments of the assessee for the assessment years under reference.