Law:

Section:

Proviso to section 64(2) of the Income-tax Act, 1961-Transfer of assets-Throwing into common hotchpot of HUF-M, karta of assessee-HUF, threw his individual property into family hotchpot-For assessment year 1973-74. Ito assessed income derived from converted property in the hands of both m as individual and assessee-HUF-Assessment made on m became final-Whether tribunal correct in holding that impugned income should be excluded from assessment of assessee-HUF-Held, on facts, yes Facts M, the karta of the assessee-HUF, had deposited a sum of Rs. 20,000 in his individual account with a firm. Subsequently, M sought to impress this money with the character of HUF property and contended that he had become a partner in the said firm in his capacity as the karta of his HUF. During the accounting year relevant for the assessment year 1973-74, M received certain amounts by way of interest and share income from the firm. The ITO assessed the aforesaid amounts in the hands of both M as an individual and the assessee-HUF. On appeal, the AAC sustained the assessment made on M but cancelled that made on the HUF. M's further appeal to the Tribunal and reference to the High Court failed and, thus, the assessment made on M became final. Meanwhile, the revenue had also appealed to the Tribunal against the cancellation of the impugned amounts in the hands of the assessee-HUF but the Tribunal rejected the appeal. On reference: Held In view of the proviso to section 64(2), once a particular income is included in the total income of an individual, it has to be excluded from that of the family, etc. In the instant case, the income sought to be included in the hands of the assessee-HUF had already been finally assessed in the hands of M as an individual. Case referred to Mulk Raj v. CIT [1979] 120 ITR 387 (All.). Judgment C.S.P. Singh J.-The Income-tax Appellate Tribunal, Delhi Bench C, has referred the following question of law for our opinion ; "Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the interest income of Rs. 1,000 and share income of Rs. 8,204 from the firm of M/s. Sohna Mal Hakim Chand & Co. should be excluded from…

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