Law: Income Tax Act, 1922

Section: 23(3),25A,66

Law: Income Tax Act, 1961

Section: 171,256

Section 171 of the Income-tax Act, 1961 [Corresponding to section 25A of the Indian Income-tax Act, 1922] - Hindu undivided family - Assessment after partition - Assessment year 1946-47 - Whether when a claim is made under section 25A of 1922 Act, points to be decided by ITO are whether there has been a partition in family, and if so, what definite portions are in which division has been made among members or groups of members - Held, yes - Whether question as to what income of family assessable to tax under section 23(3) of 1922 Act was would be foreign to scope of an enquiry under section 25A - Held, yes Section 256 of the Income-tax Act, 1961 [Corresponding to section 66 of the Indian Income-tax Act, 1922] - High Court - Reference to - Assessment year 1946-47 - Whether finding of Tribunal that a sum credited in assessee's books of account did not represent price of family jewels sold but was concealed business income, was a finding of fact which could be attacked in reference under section 66 of 1922 Act only if it could be shown that there was no evidence to support it or that it was perverse - Held, yes FACTS The appellant was a Hindu undivided family carrying on business as piece goods merchants. In the course of the assessment for the assessment year 1946-47, the appellant claimed under section 25A that there had been a partition in the family on 24-4-1945. The ITO held that the partition was true, and that the family had become divided into five groups. As regards the income assessable, the dispute related to six sums aggregating to Rs. 2,30,346 shown in the accounts as the sale proceeds of ornaments. It was stated that at the partition the jewels of the family were sold in six lots, that the price realised therefrom was invested in the business, and that the credits in question related thereto. The ITO declined to accept this explanation. He observed that while the book of the appellant showed that what was sold was ornaments, the accounts of the buyer showed sale of gold. He also pointed out that while the weight of the ornaments according to the partition agreement, was 3,422 tolas, the weight of gold which was actually sold was 3,133 tolas. The…

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