COMMISSIONER OF INCOME-TAX V. MOHMADHUSSAIN JAMALBHAI

ITR/30/1992

AI Insights

The case involves the Commissioner of Income-Tax versus Mohmadhussain Jamalbhai, concerning the taxation of income received by the Lokhandwala Family Trust, in which the respondent was a trustee. The trust had a partnership in a firm, and the income from this partnership was contested regarding its inclusion in the personal income of the trustee for the assessment years 1978-79, 1979-80, 1980-81, and 1981-82. The primary legal questions revolved around the correct interpretation and application of Section 263 of the Income-tax Act, particularly whether the income should be taxed in the hands of the trust or the individual trustee. The Appellate Tribunal had previously ruled in favor of the trust, which led to these references by the revenue.

• Counselvise Citation: [2001] 140 COUNSELVISE.COM (IT) 677674 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 16-10-2001
• Assessment Year: misc
• Laws Referred To: Income-tax Act
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: R K PATEL
• Assessee Lawyers: AKIL KURESHI; MANISH BHATT
• Keywords: Appellate Tribunal; Assessment Year; Commissioner of Income Tax; Income Tax; Trust income; Lokhandwala Family Trust
• Section: 263

Judgement Text

" )) IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX REFERENCE No 30 of 1992 with INCOME TAX REFERENCE No 17 of 1993 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 MOHMADHUSSAIN JAMALBHAI -------------------------------------------------------------- Appearance: 1. INCOME TAX REFERENCE No. 30 of 1992 MR AKIL KURESHI with MR MANISH R BHATT for Petitioner No. 1 MR RK PATEL for Respondent No. 1 -------------------------------------------------------------- CORAM : MR.JUSTICE M.S.SHAH and MR.JUSTICE D.A.MEHTA Date of decision: 16/10/2001 COMMON ORAL JUDGEMENT (Per : MR.JUSTICE M.S.SHAH) In ITR No.30 of 1992 at the instance of the revenue, the following questions have been referred for our opinion in respect of assessment years 1978-79, 1979-80 and 1981-82:- (i) Whether the Appellate Tribunal is right in law and on facts in cancelling the order made by the Commissioner of Income-tax under section 263 of the Income-tax Act ? (ii) Whether, the Appellate Tribunal is right in law and on facts in holding that the income of the trust in which the assessee was a trustee, is to be taxed in the hands of the trust on a substantive basis and to be excluded from the income of the assessee ? 2. In ITR No.17 of 1993, at the instance of the revenue, the following question has been referred for our opinion in respect of the same assessee for assessment year 1980-81:- \"Whether, the Appellate Tribunal has been right in law holding that income of Rs.92,875/- being share from partnership firm belonged to Lokhandwala Family Trust and it cannot be included in the total income of the assessee ?\" 3. We have heard Mr Akil Kureshi learned counsel for the revenue and Mr RK Patel learned counsel for the respondent-assessee. 4. The assessee is an individual who had settled a trust styled as Lokhandwala Family Trust. The said trust became a partner in a partnership firm. The assessee claimed that the share income belonged to the trust. The Assessing Officer, however, rejected the said contention and included in the hands of the assessee the said share income from the partnership firm. The Commissioner of Income-tax (Appeals) deleted the inclusion of share income in in the hands of the assessee in view of the decision of the Tribunal in the case of the same assessee for an earlier year. The Tribunal confirmed the order of the CIT (Appeals). Hence, these references at the instance of the revenue. 5. At the instance of the revenue, the references were also made to this Court on the view taken by the Tribunal requiring the Assessing Officer to make assessment in the hands of the trust on substantive basis. 6. In those references, we have declined to answer the questions raised in those references in view of the facts not being clear. The same position reveals in the instant references also. We accordingly decline to answer the questions referred to us in the present references. 7. The References accordingly stand disposed of with no order as to costs. (M.S. Shah,J) (D.A. Mehta,J) zgs/- "