THE COMMR. OF WEALTH TAX (C) LDH. vs. ASHOK KUMAR & SONS
What did the High Court hold?
The High Court held that the property received by the assessee on partial partition, and any accretion thereto, continued to be joint family property in the hands of the HUF constituted by the assessee subsequently. Consequently, the value of such property was not includible in the assessee's individual assessment. The Court's reasoning was based on the fact that this issue had been settled by a prior judgment of the same court dated August 30, 2004, in ITR Nos. 7 of 1989 (The Commissioner of Income Tax (Central) Ludhiana v. Sh. Pawan Kant). The Court also relied on its earlier judgments in Commissioner of Income Tax v. Bhagat Singh (1998) 229 ITR 239, and judgments of the Patna High Court in Commissioner of Income Tax v. Shankar Lal Budhia (1987) 165 ITR 380, and the Madhya Pradesh High Court in Commissioner of Income Tax, MPI v. Krishan Kumar (1983) 143 ITR 462. The question of law was answered in favour of the assessee and against the revenue. No issue was left undecided.
What were the facts?
This judgment concerns two Wealth Tax References (WTR Nos. 43 of 1995 and 13 of 1996) before the High Court of Punjab and Haryana at Chandigarh. The references arose from an order of the Income Tax Appellate Tribunal (ITAT), Chandigarh Bench, dated January 25, 1994, concerning assessment year 1984-85. The core issue involved whether property received by the assessee (Shri Ashok Kumar & Sons, HUF) on partial partition, and any accretion thereto, belonged to the HUF and was therefore not includible in the assessee's individual assessment. The Commissioner of Wealth Tax was the petitioner, and Shri Ashok Kumar & Sons (HUF) was the respondent. The High Court noted that the issue was already settled by a previous judgment 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 accretion thereto belonged to the assessee, HUF, and that the value is not includible in his individual assessment? (Question of law) Assessee's Contention: The judgment does not explicitly record any arguments made by the assessee's counsel. However, the outcome suggests the assessee's position was that the property remained HUF property and was not includible in individual assessment. Revenue's Contention: The judgment does not explicitly record any arguments made by the revenue's counsel. However, the reference itself implies the revenue challenged the ITAT's finding that the property belonged to the HUF and was not includible in the individual assessment.
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Cause title — parties, addresses and appearances
JUDGMENT: This order will dispose of WTR Nos.43 of 1995 and 13 of 1996 as both the cases involve same question of law. Following question of law has been referred for opinion of this Court by the Income Tax Appellate Tribunal, Chandigarh Bench, Chandigarh arising out of its order dated 25.1.1994, RA No.28/Chandi/94, in respect of assessment year 1984-85:- “Whether on the facts and in the circumstances of the case, the Income Tax Appelalte Tribunal was right in law in holding that the property received by the assessee on partial partition and accretion thereto belonged to the assessee, HUF and that the value is not includible in his individual assessment?” It is not disputed by the learned counsel for the parties that the issue stands settled by judgment of this court dated 30.8.2004 in ITR Nos.7 of 1989 (The Commissioner of Income Tax (Central) Ludhiana v. Sh. Pawan Kant). Order of reference itself refers to pendency of the said case in this court.
WTR No.43 of 1995 2 In ITR No.7 of 1989, this court decided the issue in favour of the assessee and against the revenue by holding that the property received by the assessee on partition of HUF continued to be joint family property in the hands of HUF constituted by the assessee subsequently. Reliance was placed on earlier judgments of this court in Commissioner of Income Tax V. Bhagat Singh (1998) 229 ITR 239, of the Patna High Court in Commissioner of Income Tax V. Shankar Lal Budhia (1987) 165 ITR 380 and of the Madhya Pradesh High Court in Commissioner of Income Tax, MPI v. Krishan Kumar, (1983) 143 ITR 462. In view of the above, we answer question in favour of the assessee and against the revenue. (Adarsh Kumar Goel) Judge September 5, 2006 (Rajesh Bindal) 'gs' Judge
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