COMMISSIONER OF INCOME TAX vs. ANANDIBEN K SHAH

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ITR/307/1992HC GujaratGJHC24015647199216 October 2001Author: HONOURABLE MR. JUSTICE MOHIT S. SHAH,HONOURABLE MR. JUSTICE D.A.MEHTA3 pages

AI SummaryAllowed

What did the High Court hold?

The High Court held that the Appellate Tribunal was right in law in deleting the addition of Rs.1,23,885/- made under Section 64(1)(i) of the Act. The reasoning was based on the High Court's own prior decisions in Dinubhai Ishwarlal Patel vs. ITO and CIT vs. Vallabhdas Manjibhai, which were also impliedly approved by the Apex Court in CIT vs. Shri Om Prakash & Others. The ratio decidendi is that if a High Court has already ruled on a specific interpretation of a tax provision, subsequent assessments should follow that ruling unless it has been overturned or distinguished. The Tribunal correctly followed the established precedent. The question referred to the Court was answered in the affirmative, in favour of the assessee. The reference was disposed of accordingly.

What were the facts?

The assessee, Anandiben K Shah, was a partner in a firm. Another partner was K.V. Shah HUF, represented by the assessee's husband. For assessment year 1984-85, the Income Tax Officer (ITO) included the HUF's share income from the firm in the assessee's total income under Section 64(1)(i) of the Income Tax Act. The ITO disregarded a Gujarat High Court decision in Dinubhai Ishwarlal Patel vs. ITO. The assessee appealed to the CIT (Appeals), who ruled in their favour. The Income Tax Appellate Tribunal (ITAT) confirmed the CIT (Appeals)'s order. The revenue then sought a reference to the High Court.

What were the issues?

1. Whether the Appellate Tribunal is right in law and on facts in deleting the addition of Rs.1,23,885/- made under Section 64(1)(i) in respect of the share income of K.V. Shah HUF? The revenue's contention is that the Tribunal erred in deleting the addition. The assessee's contention, as evidenced by the ITAT's decision, is that the addition was wrongly made and should be deleted. The revenue relies on its disagreement with the Gujarat High Court's decision in Dinubhai Ishwarlal Patel vs. ITO, while the assessee and the lower appellate authorities relied on this decision. The High Court also considered its own subsequent decision in CIT vs. Vallabhdas Manjibhai and the Supreme Court's implied approval in CIT vs. Shri Om Prakash & Others.

Which sections of the Income-tax Act were involved?

Section 64(1)(i)

AI-generated summary — verify with the full judgment below

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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX REFERENCE No 307 of 1992

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 -------------------------------------------------------------- COMMISSIONER OF INCOME TAX Versus ANANDIBEN K SHAH -------------------------------------------------------------- Appearance: MR AKIL QURESHI FOR MR MANISH R BHATT for Petitioner No. 1 NOTICE SERVED for Respondent No. 1

--------------------------------------------------------------

CORAM : MR.JUSTICE M.S.SHAH and MR.JUSTICE D.A.MEHTA

Date of decision: 16/10/2001

ORAL JUDGEMENT (Per : MR.JUSTICE D.A.MEHTA)

The Income Tax Appellate Tribunal has referred the following question for the opinion of this Court at the instance of the revenue :

"Whether, the Appellate Tribunal is right in law and on facts in deleting the addition of Rs.1,23,885/- added under sec.64(1)(i) in respect of share income of K.V.Shah HUF?" 2 The assessment year is 1984-85. The assessee was a partner in a partnership firm and one of the other partners was K.V.Shah, HUF represented by the karta i.e. husband of the assessee. The ITO included the share income of the HUF from the said firm in hands of the assessee u/s.64(1)(i) of the Act. His attention was the Apex Court in the case of CIT vs. Shri Om Prakash & Others (1996) 217 ITR 785. 5 In light of the aforesaid decisions we find no good reason to take any other view of the matter. The Tribunal was right in law in deleting the addition of Rs.1,23,885/- added under section 64(1)(i) of the Act. The question referred to us is therefore answered in the affirmative i.e. in favour of the assessee and against the revenue.

6 The reference stands disposed of accordingly with no order as to costs. (M.S.Shah,J) (D.A.Mehta,J)

m.m.bhatt

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