Law:

Section:

JUDGMENT B.J. Divan, CJ.-In this reference, at the instance of the revenue, the following question has been referred to us for our opinion: "Whether; on the facts and in the circumstances of the case, the correct status of the assessee in respect of the properties inherited by him on the death of his father was as representing his Hindu undivided family or as an individual ?" The facts giving rise to this reference are as follows: The assessment years under consideration are 1966-67 and 1967-68. The assessee who seems to have died during the pendency of the proceedings was one Dr. Babubhai Mansukhbhai. The assessee's father, Mansukhbhai, died intestate on October 8, 1963, leaving certain self-acquired properties. On the death of Mansukhbhai these self-acquired properties devolved upon his widow and his son, that is, the assessee. The properties left by the deceased father of the assessee consisted of loans advanced by the deceased to certain parties and also bank deposits. The assessee inherited one-half share of the said loans and bank deposits. Income by way of interest on the one-half share amounted to Rs. 4,588 in the year of account relevant to assessment year 1966-67 and to Rs. 4,986 in the year of account relevant to assessment year 1967-68. The assessee contended before the Income-tax Officer that the interest income should be assessed as income of the Hindu undivided family consisting of the deceased himself, his sons and his wife. The Income-tax Officer rejected the contention of the assessee and following the decision of the Allahabad High Court in Commissioner of Income-tax v. Ram Rakshpal, Ashok Kumar [1968] 67 ITR 164 (All) held that since the father had his individual properties, the question of treating the said individual properties in the hands of the assessee as Hindu undivided family properties did not arise. According to the Income-tax Officer, the Mysore High Court in the case of Commissioner of Income-tax v. Smt. Nagarathnamma [1970] 76 ITR 352 (Mys) had also confirmed the view of the Allahabad High Court. Consequently, the Income-tax Officer assessed the income from interest in the hands of the assessee as his individual income and not…

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