AMRIT LAL Vs. COMMISSIONER OF INCOME-TAX

JUDGEMENT

(1.) THE matter here pertains to the assessment year 1976-77.

(2.) ON October 13, 1970, the assessee, Shri Amrit Lal, as karta of the Hindu undivided family consisting of himself, his wife and two minor sons impressed his separate funds to the extent of Rs. 31,226 with the character of Hindu undivided family funds. Later, with effect from October 13, 1970, he became a partner of a firm, Amritsar Brick Kiln Co. , on behalf of the Hindu undivided family and this entire amount of Rs. 31,226 was invested by the Hindu undivided family as its capital in this firm. During the assessment year 1976-77, the Hindu undivided family received as its share interest amounting to Rs. 8,223 and profit of Rs. 17,394, the total of the two being Rs. 25,617. The question that came up for consideration was : whether this entire sum of Rs. 25,617 was includible in the assessment of the assessee under Section 64 (2) (b) of the Income-tax Act, 1961 (hereinafter referred to as "the Act" ).

(3.) ACCORDING to the Tribunal, this was a case of conversion of property of Rs. 31,226 into other property and was thus hit by the provisions of Section 64 (2) (b) of the Act and the income derived from this converted property must be deemed to arise to the individual and not to the family.