COMMISSIONER OF INCOME TAX vs. HEMENDRA FAMILY TRUST

ITR/192/1995HC GujaratGJHC24022515199507 November 2001Author: HONOURABLE MR. JUSTICE MOHIT S. SHAH,HONOURABLE MR. JUSTICE D.A.MEHTA2 pages

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What did the High Court hold?

The High Court answered the first question in the negative, in favour of the assessee and against the revenue. The court's reasoning was based on a previous decision rendered on 6/11/2000 in Income Tax Reference No. 238 of 1985 between the same parties. As no distinguishing feature was pointed out by the revenue, the Tribunal was deemed correct in holding that the income of the assessee trust could not be taxed in the hands of Shri Hemendra Patel. Regarding the second question, the court declined to answer it, considering it to be an aspect of the controversy and more argumentative in nature, in light of the answer to the first question. The reference was disposed of accordingly with no order as to costs.

What were the facts?

This case involves an Income Tax Reference filed by the Commissioner of Income Tax against Hemendra Family Trust for assessment years 1982-83 and 1983-84. The Gujarat High Court was asked to provide its opinion on two questions referred by the Income Tax Appellate Tribunal. The revenue appeared through its counsel, Mr. M.H. Joshi, while the respondent-assessee, Hemendra Family Trust, though served, did not appear. The High Court noted a previous decision of the same court on 6/11/2000 in a similar reference between the same parties.

What were the issues?

The Tribunal referred two questions for the opinion of the High Court: 1. Whether, the Appellate Tribunal is right in law and on facts in holding that the income of the assessee trust cannot be taxed in the hand of Shri Hemendra Patel? (Question of law and fact) 2. Whether, the Appellate Tribunal is right in relying on the decision of the Gujarat High Court particularly when the department contended that the decision of the Supreme Court in the case of McDowell was squarely applicable? (Question of law) Contentions: Assessee: Not recorded as they did not appear. Revenue: Contended that the Supreme Court's decision in the case of McDowell was squarely applicable and that the Tribunal was wrong in relying on a Gujarat High Court decision.

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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX REFERENCE No 192 of 1995

For Approval and Signature:

Hon'ble MR.JUSTICE M.S.SHAH and Hon'ble MR.JUSTICE D.A.MEHTA ============================================================ 1. Whether Reporters of Local Papers may be allowed : NO to see the judgements?

To be referred to the Reporter or not? : NO 3. Whether Their Lordships wish to see the fair copy : NO of the judgement?

Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder?

Whether it is to be circulated to the Civil Judge? : NO

The order continues below.

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