COMMISSIONER OF INCOME TAX vs. MRUNALINIDEVI PUAR OF DHAR

ITR/229/1995HC GujaratGJHC24022552199506 February 2008Author: HONOURABLE MR. JUSTICE D.A.MEHTA,HONOURABLE MR. JUSTICE Z.K.SAIYED9 pages
AI SummaryRemanded

What were the facts?

The Income Tax Appellate Tribunal (ITAT) referred three questions to the Gujarat High Court concerning the assessment of income from properties of a deceased husband. The assessee is the widow and sole legal heir of the deceased, Shri Anandrao Puar, who died intestate on April 25, 1980. The dispute is whether the income from the deceased's properties should be taxed in the hands of the assessee as an individual (Revenue's contention) or as an executor of the estate (assessee's contention). The Assessing Officer, Indore, had assessed the assessee as an executor for Wealth Tax and Income Tax for assessment years 1981-82 to 1987-88, finding the administration of the estate incomplete during the assessment years in question (1981-82 and 1982-83). The Tribunal had deleted the income from the deceased's properties from the assessee's individual assessment, relying on Supreme Court and High Court decisions.

What did the High Court hold?

The Gujarat High Court held that the Revenue was bound by the judgment of the jurisdictional High Court of Madhya Pradesh, which had previously decided the matter between the same parties for the same assessment years. The Madhya Pradesh High Court had held that the properties of the deceased did not form part of the taxable wealth of the assessee as an individual until the estate was fully administered and the residue became available to her. Since the Revenue had accepted that decision, the Gujarat High Court found no reason to interfere with the Tribunal's view. Consequently, the income from the properties was not taxable in the hands of the assessee as an individual. The Court returned the reference unanswered, disposing of the matter. No issue was expressly left undecided.

What were the issues?

1. Whether, on the facts and in the circumstances, the assessee, as the wife and sole surviving successor and legal heir, should be assessed for income from her late husband's properties under Section 159 or Section 168 of the Income Tax Act, 1961. 2. Whether the Tribunal was justified in deleting Rs.12,72,790/- for AY 1981-82 and Rs.99,000/- for AY 1982-83, representing income from the deceased husband's properties, by relying on Navnitlal Sakerlal Vs. C.I.T. (193 ITR 16). 3. Whether the income from the late Shri Anandrao Puar's properties for AY 1981-82 and 1982-83 was rightly deleted from the assessee's individual assessment because it was assessed on the assessee as an executor under Section 168 of the IT Act, 1961. Assessee's Contentions: The assessee argued that the income from the deceased's estate should be taxed in her hands as an executor, not as an individual, especially since she was assessed as an executor by the AO for multiple years and the estate administration was not complete. The assessee also contended that the Revenue, being the same applicant, should not be permitted to urge contrary to a previous decision of the High Court of Madhya Pradesh in the assessee's own case. The assessee relied on Navnitlal Sakarlal Vs. CIT and other High Court decisions. Revenue's Contentions: The Revenue contended that Section 168 of the Act and Section 19A of the Wealth Tax Act, 1957, apply only to testate succession, not intestate succession, and thus the assessee should be assessed as an individual. The Revenue argued that the Madhya Pradesh High Court's decision in the assessee's own case was sub silentio or contrary to law and therefore not binding. The Revenue cited Reg. Director, ESI Corporation Vs. Kirloskar Bros., British India Corporation Ltd. Vs. CIT, M.M.Ipoh & Ors. Vs. CIT, Arvind Boards & Paper Products Ltd. Vs. CIT, and N.R.Paper And Board Ltd. & Ors, Vs, Dy. CIT.

Which sections of the Income-tax Act were involved?

Section 159,Section 168,Section 19A

AI-generated summary — verify with the full judgment below

ITR/229/1995 1/9 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX REFERENCE No. 229 of 1995 For Approval and Signature: HONOURABLE MR.JUSTICE D.A.MEHTA HONOURABLE MR.JUSTICE Z.K.SAIYED ===================================================== 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ===================================================== COMMISSIONER OF INCOME TAX - Applicant(s) Versus MRUNALINIDEVI PUAR OF DHAR - Respondent(s) Appearance : MR BB NAIK for Applicant(s) : 1, MR SN SOPARKAR,SENIOR ADVOCATE with MRS.SWATI SOPARKAR for Respondent(s) : 1, ==================================================== CORAM : HONOURABLE MR.JUSTICE D.A.MEHTA and HONOURABLE MR.JUSTICE Z.K.SAIYED Date : 06/02/2008 ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE D.A.MEHTA)

ITR/229/1995 2/9 JUDGMENT 1 The Income Tax Appellate Tribunal

The order continues below.

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