C.I.T. LUDHIANA vs. M/S PAWAN KANT AND SONS
What did the High Court hold?
The High Court held that the question of law referred to it was covered against the Revenue by a previous decision of a Division Bench of the same court in I.T.R. No. 7 of 1989, titled The Commissioner of Income Tax (Central), Ludhiana v. Pawan Kant, decided on August 30, 2004. This prior decision concerned the same assessee but for the assessment year 1981-82. Therefore, following the precedent, the High Court answered the posed question against the Revenue and in favour of the assessee. The ITAT's finding that the property received on partial partition and its accretions belonged to the assessee HUF, and that the income therefrom was assessable in the hands of the HUF, was upheld. No specific reasoning beyond the reliance on the earlier judgment was provided in this order.
What were the facts?
This case involves a reference to the High Court of Punjab and Haryana concerning an Income Tax Appellate Tribunal (ITAT) order dated September 28, 1994, in I.T.A. No. 1322/Chandi/1989. The assessment year in question is 1986-87. The dispute pertains to whether property received by the assessee on partial partition, along with its accretions, belonged to the assessee HUF and if the income derived from it was assessable in the hands of the HUF. The Revenue is the applicant, and M/s Pawan Kant & Sons is the respondent assessee. The High Court noted that the matter was covered by a previous decision of a Division Bench of the same court.
What were the issues?
1. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in holding that the property received by the assessee on partial partition and accretions thereto belonged to the assessee HUF and that the income flowing therefrom was assessable in the hands of the HUF? Assessee's Contention: The assessee's position, as implied by the High Court's decision, is that the property and its income are indeed assessable in the hands of the HUF. Revenue's Contention: The Revenue contends that the ITAT was not right in law in holding the property and its income to be assessable in the hands of the HUF. The Revenue is challenging the ITAT's finding on this point.
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
JUDGMENT M.M. KUMAR, J. The Income Tax Appellate Tribunal, Chandigarh Bench, has referred the following question of law, which emerges out of its order dated 28.9.1994, rendered in I.T.A. No. 1322/Chandi/1989 in respect of the assessment year 1986-87:- Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in holding that the property received by the assessee on partial partition and accretions thereto belonged to the ITR No. 80 of 1995 assessee HUF and that the income flowing therefrom was assessable in the hands of the HUF? It remains undisputed that the matter is covered against the Revenue by the order passed by a Division Bench of this Court in I.T.R. No. 7 of 1989, titled as The Commissioner of Income Tax (Central), Ludhiana v. Pawan Kant, decided on 30.8.2004, in respect of the same assessee for the assessment year 1981-82. In the present case, the assessment year involved is 1986-87. In view of the above, the question posed in the first para is answered against the revenue and in favour of the assessee. (M.M. KUMAR) JUDGE (RAJESH BINDAL) February 13, 2007 JUDGE Pkapoor 2
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