TMI Blog1984 (2) TMI 166X X X X Extracts X X X X X X X X Extracts X X X X ..... G. Saharia who died intestate sometime in March, 1975. The devolution of his estate is admittedly covered by the provisions of the Hindu Succession Act, 1956, s. 8 whereof is applicable in the present case. The said section reads as follows: "General rules of succession in the case of males: The property of a male Hindu dying intestate shall devolve according to the provisions of this Chapter: (a) firstly, upon the heirs being the relatives specified in class I of the Schedule; (b) secondly, if there is not heir of class I, then upon the heirs, being the relatives specified in class II of the Schedule; (c) thirdly, if there is not heir of any of the two classes, then upon the agnates of the deceased; and (d) lastly, if there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 41,75,306. Inspite of the fact that Late R. G. Saharia died leaving behind net liabilities, the heirs had distributed the assets and certain liabilities of the late R. G. Saharia s estate in piecemeal and partial manner without any actual transfer of assets and liabilities as making any arrangement or compromise with the several creditor of R. G. Saharia s estate. Here, I may note that in the case of a person leaving a net liability of more than Rs.40 lakhs how there could be any distribution of assets by the heirs without first satisfying the creditors. Under such circumstances, I do not accept the distribution of assets and liabilities as genuine and valid without any succession certificate and actual transfer. Thus neither the dividend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of late R. G. Saharia is clearly covered by s. 8 of the Hindu Succession Act, and each of the seven heirs shall be entitled to 1/7th share of the assets and will be liable to the debts contacted by the late R. G. Saharia to the extent of the assets inherited by him. The actual distribution in accordance with the law has perforce to be carried out and this having not been done in this case, I agree with the ITO that the legality of the arrangement through which the assets and liabilities have been sought to be distributed in the present case was clearly not acceptable. Therefore, in conformity with the position set out in my order on appeal No. 230-Dib/80-81 of 30th Oct., 1981 in the case of the estate of late R. G. Saharia, I hold that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l consideration to the facts of the case and the rival submissions. The order of the ITO, as far as I can see it, has two limbs. By the first limb, he rejects the assessee s stand that the dividend income belongs to him and the interest payable with regard to the share from which the dividend income has been derived should be considered in the hands of the assessee. He, accordingly, excluded the dividend income of Rs. 73,781, and simultaneously ignored the claim of interest to the extent of Rs. 1,70,000 which in his opinion was relatable to the above dividend income. The other limb in his order is to accept the claim of the assessee that interest to the extent of Rs. 75,957 should be deducted form the income of the assessee from the various ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deductions allowable on account of various items of expenditure. The only expenditure allowed by the ITO in his order is that of interest. Whether or not that deduction is allowable has to be reconsidered by the ITO. That is the clear purpose of the direction of the ld. AAC. 9. The question is whether the ld. AAC could give such a direction when the assessee himself was not disputing the computation of his total income, except with regard to the refusal of the ITO to take into account the dividend income and the relatable interest. It is trite law that the ld. AAC can do all that an ITO could do and that his powers are co-extensive and co-terminus with those of the ITO. The AAC could, therefore, consider the correctness of that part of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
