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2005 (11) TMI 45 - HC - Income TaxHUF - addition of profit in the hands of the Hindu undivided family on the ground that the Hindu undivided family is not a juristic person - Income-tax Act itself provides that the Hindu undivided family is an assessee. In that case the same person has dual capacity. He can enter into an agreement in different capacity, i.e., as karta of the Hindu undivided family and as an individual. Thus a karta can be assessed in the individual capacity also for the income earned in his individual capacity - When one person has dual personality under the Income-tax Act and if the Hindu undivided family sub-let the contract, without there being an adverse tax effect and specially when the income has not escaped as has been found by the Commissioner of Income-tax (Appeals) in this case, then in our view the contract given to an individual cannot be said to be a sham transaction as there was no tax evasion in this case. – Thus we see no substance in the arguments of Department that the income from contract which has been assessed in the hands of the individual should be assessed in the hands of the HUF
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