COMMISSIONER OF WEALTH TAX vs. GORDHANBHAI J PATEL

WTR/39/1983HC GujaratGJHC24012004198328 January 1997Author: HONOURABLE MR. JUSTICE R.K.ABICHANDANI,HONOURABLE MR. JUSTICE R.BALIA2 pages
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What were the facts?

This case involves a reference made by the Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench "C", to the High Court of Gujarat concerning the Wealth Tax Act, 1957. The assessee is Gordhanbhai J. Patel, and the revenue is the Commissioner of Wealth Tax. The dispute revolves around the assessment year 1968-69. The ITAT had found that despite a partition effective on May 21, 1962, a Hindu Undivided Family (HUF) consisting of the assessee and his unmarried daughter continued to exist. Consequently, the addition of a gift amount to the wealth of the assessee as an individual was deemed unjustified. The High Court was asked to rule on the correctness of this finding.

What did the High Court hold?

The High Court answered the referred question in the affirmative, meaning in favour of the assessee and against the Revenue. The Court relied on its own previous decision in the assessee's own case for the Assessment Year 1968-69, reported in 203 I.T.R 706. In that prior judgment, the High Court (Coram: G.T. Nanavati, J. and S.D. Dave, J.) had held that the Tribunal was correct in its finding that a Hindu Undivided Family (HUF) existed between Gordhanbhai and his unmarried daughter, even after a partition. Consequently, gifts made to this HUF could not be included in the individual wealth of the assessee. The present High Court followed the same reasoning and disposed of the reference accordingly, with no order as to costs. The operative direction was to answer the question in favour of the assessee.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the finding of the Appellate Tribunal that, despite the partition effective on 21st May, 1962, there was a Hindu Undivided Family of Shri Gordhanbhai Jethabhai Patel and his unmarried daughter, and consequently the addition of the gift amount in the wealth of the assessee individual was not justified, is correct in law? (Question of law) Assessee's Contention: The judgment does not record specific arguments made by the assessee before the High Court. However, the outcome indicates the assessee supported the ITAT's finding. Revenue's Contention: The judgment does not record specific arguments made by the revenue before the High Court. However, the reference itself implies the revenue challenged the ITAT's decision.

Which sections of the Income-tax Act were involved?

Section 27

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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

WEALTH TAX REFERENCE No 39 of 1983

For Approval and Signature:

Hon'ble MR.JUSTICE R.K.ABICHANDANI and MR.JUSTICE R.BALIA. ============================================================ 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?

The order continues below.

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