COMMISSIONER OF INCOME TAX V. RAMANLAL NAGINDAS SHAH

ITR/78/1986

AI Insights

The case involves the Commissioner of Income Tax versus Ramanlal Nagindas Shah, concerning the taxability of share income received by Ramanlal and his minor son Dilipkumar from the partnership firm M/s. Nahalchand Dhanjibhai & Co. during the Assessment Year 1976-77. The Income Tax Appellate Tribunal referred questions to the High Court regarding the correct tax treatment of these incomes under the Hindu Undivided Family (HUF) status claimed by Ramanlal. The main legal issues revolved around the taxability of income in the hands of the Karta of a smaller HUF and the non-clubbability of income derived by a minor.

• Counselvise Citation: [2001] 140 COUNSELVISE.COM (IT) 677870 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 16-01-2001
• Assessment Year: misc
• Other Referred Cases: CIT v. Ramanlal Nagindas Shah (1992) 195 ITR 9
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: NOTICE SERVED
• Assessee Lawyers: MANISH BHATT
• Keywords: HUF; Income Tax; Partnership firm; Share Income; Taxability
• Section: 64

Judgement Text

" IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX REFERENCE No 78 of 1986 For Approval and Signature: Hon'ble MR.JUSTICE J.M.PANCHAL and Hon'ble MR.JUSTICE M.S.SHAH ============================================================ 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 RAMANLAL NAGINDAS SHAH -------------------------------------------------------------- Appearance: 1. INCOME TAX REFERENCE No. 78 of 1986 MR MANISH R BHATT for Petitioner NOTICE SERVED for Respondent No. 1 -------------------------------------------------------------- CORAM : MR.JUSTICE J.M.PANCHAL and MR.JUSTICE M.S.SHAH Date of decision: 16/01/2001 ORAL JUDGEMENT (Per : MR.JUSTICE J.M.PANCHAL) At the instance of Commissioner of Income-tax, Gujarat-IV, Ahmedabad, the Income Tax Appellate Tribunal, Ahmedabad Bench 'SMC', has referred following two questions of law for opinion of this Court in respect of Assessment Year 1976-77 : 1. Whether, on the facts and circumstances of the case, the Appellate Tribunal was right in law in holding that the share income received by Ramanlal from the partnership firm M/s. Nahalchand Dhanjibhai & Co. during the previous year under consideration was taxable in his hands in his capacity as Karta of the smaller HUF as comprised by himself, his wife and their two unmarried daughters ? 2. Whether, on the facts and circumstances of the case, the Appellate Tribunal was right in law in holding that the share income derived by Dilipkumar, minor son of partner Ramanlal from the partnership firm M/s. Nahalchand Dhanjibhai & Co. during the previous year under consideration was not clubbable with the share income derived by Ramanlal from the said firm if that share income was taxable in Ramanlal's hands in his capacity as Karta of the smaller HUF ? At the instance of the assessee, the Income Tax Appellate Tribunal has also referred following question of law for opinion of this Court arising out of R.A.No. 860/Ahd/1985, in respect of Assessment Year 1976-77 : \"Whether, on the facts and circumstances of the case, the Appellate Tribunal was right in law in holding that the share income derived by partner Ramanlal from partnership firm M/s. Nahalchand Dhanjibhai & Co. during the previous year under consideratioin was to no extent taxable in the hands of larger HUF comprised by Ramanlal, his wife and their major sons Jayantilal and Rajendrakumar and minor son Dilipkumar and their minor unmarried daughters ?\" 2. The Income-tax Officer took the status of the assessee as individual as against HUF claimed by him. The I.T.O. also included the shareof minor under section 64 in the hands of the assessee. Further the share of income derived by the assessee from the partnership firm M/s. Nahalchand Dhanjibhai & Co. during the previous year under consideration was held not to be taxable in the hands of the larger HUF comprised by the assessee, his wife and their major sons Jayantilal and Rajendrakumar as well as minor son Dilipkumar and their minor unmarried daughters. 3. Though the respondent is duly served, he has not appeared in the proceedings. 4. We have heard the learned counsel for the Revenue. The learned counsel for the Revenue states at the Bar that the controversies raised in the present Reference are concluded by the decision rendered in the case of this very assessee rendered in CIT v. Ramanlal Nagindas Shah (1992) 195 ITR 9. 5. In view of the principle laid down by the High Court in the above quoted decision, Questions no.1 & 2 referred at the instance of the Revenue, are answered in favour of the assessee and against the Revenue; whereas Question No.3, which is referred at the instance of the assessee, is answered in favour of the Revenue and against the assessee. The Reference accordingly stands disposed of, with no order as to costs. ( J.M.Panchal,J.) ( M.S.Shah, J.) (patel) "