TMI Blog1981 (11) TMI 94X X X X Extracts X X X X X X X X Extracts X X X X ..... nt to the assessment year 1975-76, the assessee has derived such income amounting to Rs. 24,466. The assessee had filed a return admitting the above income but claiming the status as HUF consisting of himself as karta and his wife and children. Before the ITO the assessee had relied upon the ruling of the Gujarat High Court in the case of CIT v. Dr. Babubhai Mansukhbhai [1977] 108 ITR 417 in support of his claim. The ITO, however, rejected the claim of the assessee following the ruling of the Allahabad High Court in the case of CWT v. Chander Sen [1974] 96 ITR 634 and that of the Madras High Court in the case of Addl. CIT v. V.R.A. Manicka Mudaliar 1977 Tax LR 1420. He held that the income returned belonged to the assessee as an individual. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court in Addl. CIT v. P. Karuppan Chettiar were followed in preference to the decision of the Gujarat High Court in Babubhai's case. Similar view was taken in IT Appeal No. 2017 (Hyd.) of 1976-77 dated 20-9-1978. In these circumstances this appeal came up for hearing before this Special Bench constituted by the President. 4. Shri Y.V. Anjaneyulu, the learned counsel for the assessee, submitted that the ratio of the ruling of the Gujarat High Court in CIT v. Dr. Babubhai Mansukhbhai clearly applied to this case. He pointed out though the Allahabad High Court in Ram Rakshpal's case and in the case of CIT v. Chander Sen and in CIT v. Khushi Ram Rangi Lal and the Madras High Court in Addl. CIT v. V.R.A. Manika Mudaliar and in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee had claimed that the properties belonged to the joint family but the ITO rejected it, that later on an application under section 154 was filed, that in appeal was filed before the Tribunal against the ITO's refusal to rectify under section 154, that the same was dismissed by the Appellate Tribunal (Bench comprising Shri P.V.B. Rao and Shri O.V. Subramanian, Madras Bench camping at Hyderabad) in IT appeal No. 1828 (Hyd.) of 1977-78 by order dated 5-2-1979, that in the wealth-tax proceedings, the assessee had claimed that the properties under consideration to which he succeeded on the death of his father belonged to the HUF of himself, his wife and children and that the same should not be included in the net wealth of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies. He further submitted that in case it was admitted by the Tribunal then the matter should go back to the ITO for examining and considering the claim. 6. We have considered the rival submissions. The only issue that arises for decision in this appeal is whether the properties to which Shri K.S. Mohan Rao succeeded on the death of his father intestate belonged to him as an individual or belonged to his HUF and consequently in whose hands, i.e., whether in the hands of Shri K.S. Mohan Rao as individual, or Shri K.S. Mohan Rao as HUF, the income derived from the above properties should be assessed to income-tax for the assessment year 1975-76. 7. The assessee's father Shri K.S. Prakasa Rao died intestate in 1969. The assessee being the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Bench of the Madras High Court in the case of P.L. Karuppan Chettiar followed its earlier ruling referred to above, and that of the aforesaid Allahabad High Court decision in Ram Rakshapal's case. The Madras High Court dissented from the view taken by the Gujarat High Court in Dr. Babubhai Mansukhbhai's case. 5. The Calcutta High Court in the case of Malchand Thirani Sons followed the ruling of the Full Bench of the Madras High Court in P.L. Karuppan Chettiar's case, and that of the Allahabad High Court decision in Ram Rakshapal's case, and observed that the rule of survivorship was abrogated in a case where succession under section 8 opened. Shri Anjaneyulu, appearing for the assessee, had urged before us, that the ruling of the Gu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by section 8, read with section 4 of the Hindu Succession Act. This position is clearly pointed out by the Calcutta High Court in Malchand Thirani Son's case. Therefore, respectfully following the rulings of the Allahabad, Madras and Calcutta High Courts referred to above, we hold that in such cases the property would be inherited by the heir as individual property. 8. The alternative contention raised by the learned counsel for the assessee was that even assuming that the properties under consideration were the separate properties of Shri Mohan Rao, since in the tax proceedings, he had clearly declared that the properties belonged to his HUF after the death of his father on 26-6-1969, the property should be deemed to have been impres ..... X X X X Extracts X X X X X X X X Extracts X X X X
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