TMI Blog1982 (6) TMI 117X X X X Extracts X X X X X X X X Extracts X X X X ..... assessments afresh as per provisions of law. In accordance with the above direction, the ITO reframed the assessments on 16-3-1978, taking the status of the assessee as body of individuals. The plea of the assessee that the assessee was neither an AOP nor a BOI was negatived by the ITO. The assessee had taken further plea before him that, in any case, the assessee's income was exempt from tax in terms of section 10(26), as the assessee was from a scheduled tribe, deriving income from sources situated in the scheduled areas. The ITO negatived even this stand by pointing out, inter alia, as follows: "The individuals, it is admitted, belong to the Khasi Scheduled Tribe, and are entitled to exemption under section 10(26) of the Income-tax Act provided other conditions are fulfilled. But this exemption under section 10(26) of the Income-tax Act is granted to each of the members of the family in respect of their individual incomes. There is no reason as to why the collective income of the unit, i.e., clan or khop, which I have already determined to be a body of individuals, should enjoy exemption as per the above provisions of the Income-tax Act, as the Act specifically does not allow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... line, Ka Plesibon Kharshiing) was one late Mr. Ka Lynghan Kharshiing. According to the report of the Inspector of Income-tax, which has been placed on the paper book by the assessee, the following individuals were members of the family of Ka Khaddu : 1. Sri G. M. Ray Kharshiing, 2. Sri Jwain Singh Kharshiing, 3. Ka Femely, 4. Shri Hipshon Roy Kharshiing, 5. Shri Dilkersen Kharshiing, 6. Ka Malida Khaishiing, 7. Ka Lesida Kharshiing, 9. Dr. Worlok Kharshiing, 9. Ka Limora Kharshiing. As per the finding of the ITO, the business and other properties are managed by the maternal uncle and brothers of Ka Khaddu, in consultation with her father. According to him, the Ka Khaddu is just a custodian of the family or clan or khop property, and she is not the owner of this property. All the profits of the business and income from properties, etc., are to be enjoyed by all the members of the clan, though these members have no right to claim their respective shares in the clan property or business as according to the Khasi law they do not have any right to claim the partition nor their shares in the ancestral property are determinate. According to the ITO, the business of Mahari Sons is run by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of individuals. 7. The learned departmental representative also assails the finding of the learned AAC that the word 'person' used in section 10(26) would include a BOI in its compass, and that profit made by a body of individuals consisting of members of the scheduled tribe would be exempt under the said sub-section. He reiterates the stand of the ITO in this connection, and submits that the only proper way to interpret section 10(26) would be to equate the word 'person' used in the said sub-section to a physical person, viz., an individual, and income of only such individual, according to him, was exempt under section 10(26). If such individuals form a unit to do a business jointly, such unit would not be entitled to exemption under section 10(26). 8. On behalf of the assessee, the aforesaid submissions of the learned departmental representative are stoutly opposed and reliance is placed on the decision of the learned AAC in this regard. He also draws our attention to the decision of the Appellate Tribunal, Gauhati Bench, Gauhati, in WT Appeal Nos. 47 to 55 (Gauhati) of 1972-73, dated 17-3-1975, wherein our learned brothers have held, following the Full Bench decision of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liance placed by the assessee on the decision of the Appellate Tribunal in WT Appeal Nos. 47 to 55 (Gauhati) of 1972-73, dated 17-3-1975 is of no avail, because the decision of the Full Bench of the High Court on which our learned brothers had relied, for giving the said judgment has since been reversed by the Hon'ble Supreme Court by their judgment in the case of WTO v. C.K. Mammed Kayi [1981] 129 ITR 307. 10A. On the second count, however, we are not inclined to accept the contention of the learned departmental representative. The ordinary state of Khasi society is that of jointness, wherein the individual is not the unit of society; the families constitute the clan and the various clans constitute the society. The ancestral properties, as in the present case, are inherited and held not by an individual for her own exclusive use, but by Ka Khaddu for the benefit of the entire family, which in the case of Khasis, is matriarchal in form. Even the self-occupied property of a male Khasi, if acquired before marriage, and if he dies before getting married, goes to his mother or 'Kur'. The earnings of the male are regarded as part of the family earnings and are placed by him at the di ..... X X X X Extracts X X X X X X X X Extracts X X X X
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