COMMISSIONER OF INCOME TAX vs. REVABEN BABULAL MISTRY

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ITR/139/1984HC GujaratGJHC24011813198423 December 1998Author: HONOURABLE MR. JUSTICE R.BALIA,HONOURABLE MR. JUSTICE ANIL R. DAVE2 pages
AI SummaryAllowed

What did the High Court hold?

The High Court of Gujarat held that the Tribunal was right in law in coming to the conclusion that the sum of Rs. 85,266, representing the share of the husband of the assessee in his capacity as the karta of the HUF in the firm M/s. Morvi Time Co., was not liable to be included in the income of the assessee under Section 64 of the Income-tax Act, 1961. The reasoning was based on the direct applicability of the Supreme Court's decision in CIT & Ors. v. Shri Om Prakash and others (217 ITR 785), which had squarely answered the issue against the revenue. The High Court, therefore, answered the question referred to it in the affirmative, in favour of the assessee and against the revenue. No specific issue was left undecided.

What were the facts?

The case involves the Commissioner of Income Tax (Revenue) and Revaben Babulal Mistry (Assessee) for assessment years 1977-78 and 1978-79. The Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench B, passed an order in ITA Nos. 1950 to 1957/Ahd/81. The High Court of Gujarat was asked to provide its opinion on a reference made by the ITAT. The core of the dispute concerns the inclusion of a sum of Rs. 85,266, representing the share of the assessee's husband in a firm (M/s. Morvi Time Co.) as the karta of a Hindu Undivided Family (HUF), in the assessee's income. The ITAT had held that this sum was not liable to be included.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in concluding that the sum of Rs. 85,266, being the share of the husband of the assessee in his capacity as the karta of the HUF in the firm M/s. Morvi Time Co., was not includible in the income of the assessee under Section 64 of the Income-tax Act, 1961? Assessee's Contention: The judgment does not record any specific contentions made by the assessee before the High Court. However, the fact that the question is referred to the High Court implies the assessee would have supported the ITAT's decision. Revenue's Contention: The learned counsel for the revenue candidly stated that the question has been squarely answered against the revenue by the Supreme Court in CIT & Ors. v. Shri Om Prakash and others, 217 ITR 785.

Which sections of the Income-tax Act were involved?

Section 64

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX REFERENCE No 139 of 1984

For Approval and Signature:

Hon'ble MR.JUSTICE R.BALIA. and MR.JUSTICE A.R.DAVE ============================================================ 1. Whether Reporters of Local Papers may be allowed to see the judgements?

2.

To be referred to the Reporter or not?

3.

Whether Their Lordships wish to see the fair copy of the judgement?

4.

Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder?

5.

Whether it is to be circulated to the Civil Judge?

-------------------------------------------------------------- COMMISSIONER OF INCOME TAX Versus REVABEN BABULAL MISTRY -------------------------------------------------------------- Appearance: MR MANISH R BHATT for Petitioner SERVED BY RPAD - (N) for Respondent No. 1

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

CORAM : MR.JUSTICE R.BALIA. and MR.JUSTICE A.R.DAVE Date of decision: 23/12/98

ORAL JUDGEMENT

1.

For the assessment year 1977-78 to 1978-79 a common statement of the case has been submitted and following question of law has been referred to this court for its opinion by the Income Tax Appellate Tribunal, Ahmedabad Bench B arising out

of order of the Tribunal in ITA Nos. 1950 to 1957/Ahd/81:

"Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in coming to the conclusion that the sum of Rs.85,266/- being the share of the husband of the assessee, in a representative capacity as the karta of the HUF in the firm of M/s. Morvi Time Co. was not liable to be included in the income of the assessee under the provisions of Section 64 of the Income-tax Act, 1961?"

2.

As the question suggests that where a person is partner in a firm not in his capacity as an individual but in his capacity as karta of Hindu Undivided Family and he is liable to be assessed in respect of such income from the share of profit in the firm in his status otherwise than as an individual, whether the share income from such firm accruing to the spouse or minor children of such partner is liable to be clubbed in the income of respondent assessee. The Tribunal held it to be not liable to be so clubbed.

3.

It has been candidly stated by the learned counsel for the revenue that the question has been squarely answered against the revenue by the Supreme Court CIT & Ors. v. Shri Om Prakash and others 217 ITR 785. 4. In view of the aforesaid, we answer the question referred to us in affirmative, that is to say, in favour of the assessee and against the revenue.

No one has appeared on behalf of the assessee in spite of service.

There shall be no order as to costs.

(Rajesh Balia, J)

(A.R. Dave, J)

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