COMMISSIONER OF INCOME-TAX V. IQBALBHAI I MANSURI (DECD.)

ITR/38/1988

AI Insights

The case revolves around the dispute concerning the inclusion of the assessee's share of income from a firm, M/s Graduate Pickers Works, in his total income for the assessment year 1981-82. The assessee, Iqbalbhai I Mansuri, had settled his 25% share in the firm into a trust and did not include the income from this share in his personal income, filing separate returns for the trust and its beneficiaries. Initially, the Income Tax Officer (ITO) and the Appellate Assistant Commissioner (AAC) upheld the inclusion of this income, but the Tribunal later accepted the assessee's contention, leading to the reference to the High Court. The Commissioner of Income-tax's subsequent order to include this income was set aside by the Tribunal, prompting the revenue to seek judicial review.

• Counselvise Citation: [2001] 140 COUNSELVISE.COM (IT) 718420 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 20-09-2001
• Assessment Year: misc
• Other Referred Cases: Income-tax Reference Nos. 131 and 294 of 1987
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: NOTICE SERVED
• Assessee Lawyers: AKIL KURESHI; MANISH BHATT
• Keywords: Assessment Year 1981-82; Commissioner of Income Tax; Income inclusion; Income Tax; Section 263; Trust income
• Section: 263

Judgement Text

" IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX REFERENCE No 38 of 1988 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? 2. To be referred to the Reporter or not? : NO 3. Whether Their Lordships wish to see the fair copy : NO of the judgement? 4. 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? 5. Whether it is to be circulated to the Civil Judge? : NO -------------------------------------------------------------- COMMISSIONER OF INCOME-TAX Versus IQBALBHAI I MANSURI (DECD.) -------------------------------------------------------------- Appearance: 1. INCOME TAX REFERENCE No. 38 of 1988 MR AKIL KURESHI with MR MANISH R BHATT for Petitioner NOTICE SERVED for Respondent -------------------------------------------------------------- CORAM : MR.JUSTICE M.S.SHAH and MR.JUSTICE D.A.MEHTA Date of decision: 20/09/2001 ORAL JUDGEMENT (Per : MR.JUSTICE M.S.SHAH) In this reference at the instance of the revenue, the following question is referred for the opinion of this Court in respect of assessment year 1981-82 :- \"Whether on the facts and in the circumstances of the case, the order of the Commissioner of Income-tax passed under section 263 of the Income-tax Act, 1961 was rightly set aside by the Tribunal ?\" 2. We have heard Mr. Akil Kureshi, learned counsel for the revenue. Though served, none appears for the respondent-assessee. 3. The assessee had 25% share in a firm called M/s Graduate Pickers Works which he had settled in trust on 21.10.1974 as per the deed of trust dated 21.10.1974. For and from the A.Y. 1975-76, the assessee did not include the share of income from the said firm in his total income. However, he filed separate returns of the trust and the beneficiaries. Upto the assessment year 1980-81, the ITO did not accept the assessee's stand that the share of income from the said firm could not be included in his total income. The action of the ITO was upheld by the AAC. However, in further appeal before the Tribunal, the Tribunal had accepted the assessee's contention in this regard. For the year under reference, the ITO did not include the share income from the said firm, in the total income of the assessee. The Commissioner of Income-tax took action under Section 263 of the Income-tax Act, 1961 and after following the procedure laid down in the said section, directed the ITO to include the share of income from the said firm in the total income of the assessee. The assessee went in appeal before the Tribunal. The Tribunal passed the order giving rise to this reference and set aside the order passed by the CIT under Section 263 of the Act. For passing this order, the Tribunal followed its consolidated order dated 6.4.1987 in the cases of Mr. Ismailbhai M. Mansuri and others (including the assessee) and Mr. Yasinbhai I. Mansuri. 4. The references arising from the aforesaid consolidated order being Income-tax Reference Nos. 131 and 294 of 1987 came to be decided by this Court by judgment dated 12.9.2001. Following the said decision dated 12.9.2001 in Income-tax Reference Nos. 131 and 294 of 1987, we answer the question in the affirmative i.e. in favour of the assessee and against the revenue. The reference accordingly stands disposed of with no order as to costs. (M.S. Shah, J.) (D.A. Mehta, J.) sundar/- "