Law:

Section:

Section 4 of the Income-tax Act, 1961 – Hindu undivided family – Assessable as – Assessment years 1971-72 and 1972-73 – Whether when once a member of Hindu undivided family throws his interest or asset in hotchpot, it gets blended by operation of Hindu law and becomes an asset of HUF – Held, yes – Whether, therefore, where assessee abandoned his rights in partnership firm both with regard to the capital put in by him as also profits arising therefrom and threw same into common hotchpot of the Hindu undivided family, commissioner was error in treating share income arising from firm as income of individual assessable in hands of assessee – Held, yes FACTS The income derived by the assessee from the partnership firm as also the capital standing to his credit were being treated by the ITO as belonging to him as "individual" and assessments were accordingly made. On 31-12-1969, the assessee abandoned his rights in the partnership firm both with regard to the capital put in by him as also the profits arising therefrom and threw the same into the common hotchpot of the HUF which consisted of himself, his minor son, daughter and wife. On the basis of the declaration made by the assessee, the ITO treated the income arising from the partnership firm as the income of the HUF for the assessment years 1971-72 and 1972-73. He, therefore, did not include the income in the individual assessment of the assessee. The Commissioner in exercise of his powers under section 263, set aside the order of the ITO and directed him to assess that income in the hands of the assessee in his individual capacity. The Tribunal reversed the order of the Commissioner and restored that of the ITO. On reference: HELD It is well settled that any member of the joint family could throw his separate property, interest or income into the hotchpot. For that, no agreement is necessary with the other members of the family to blend his property or income that is required. It was not the case of the department that the declaration made by him that he had thrown his interest in the partnership firm into the hotchpot of the HUF was not true. The department accepted his declaration, but it was not prepared to…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492