Law: Income Tax Act, 1961

Section: 41

JUDGMENT Mehrotra, CJ.-By an order of this court, a statement of the case was called for from the Income-tax Appellate Tribunal, Calcutta Bench, and the Tribunal was directed to refer the following question of law for opinion to this court: "Whether, in the circumstances of the case, the Tribunal was justified in assessing the income of the minors in the hands of the guardians as the income of a Hindu undivided family ?" The assessment year is 1954-55 and the accounting year is 1953-54. One Kishanlal Agarwal was assessed as an individual in respect of the income arising from the business carried on in the name of Shri Krishna Rice Mills. Kishanlal died in tne year 1950 leaving his widow and his two minor sons-Basant and Ashok. In the year 1952, his widow died, and, after her death, the family consisted of her two sons-Basant and Ashok-who were minors. An application was, therefore, made before the Subordinate Judge, Nowgong, praying that a guardian be appointed of the minors' person and property and an interim appointment was made by the court by its order dated the 1st June, 1953, appointing one Nandlal Agarwal as the guardian of both the minors. Thereafter, this order was affirmed on the 15th December, 1953, with the modification that both Nandlal Agarwal and Dwarka Prosad Agarwal were appointed as guardians of the person and property of the two minors. They were directed to render accounts half-yearly to the court. On the 25th March, 1958, the guardians applied to the court asking for permission to show the accounts of the two minors separately. The court ordered the guardians to keep and submit separate accounts for each of the minors together with the accounts of profit and loss and separate expenditure of each minor. For the appreciation of facts it will be necessary to note the status in which the father of the minors was previously assessed. For the assessment year 1951-52, the profit of the mill was returned in the status of an individual. For the assessment year 1952-53 the return was filed after the death of the widow by Nandlal Agarwal as the guardian of the minors describing the status as an individual. For the next year 1953-54, the status was…

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