TMI Blog1981 (4) TMI 130X X X X Extracts X X X X X X X X Extracts X X X X ..... a Vizarat Ali Khan. The house property income which was considered to have escaped was in respect of the asst. yr. 1968-69 income from a flat and 'Gulistan', Bombay, and for the remaining years from the aforesaid flat as well as from a house at Begumpet, Hyderabad. Regarding the first mention property, the wife was considered to have a half share and regarding the later property, she was considered as the recipient of the full income. Since in the view of the ITO the properties were acquired out of funds transferred by the assessee, the income was including under s. 64 and the income not having been shown, he considered there was escapement of income which attracted the provisions of s. 147. 4. The plea of the assessee who is a Muslim by faith was that he married in 1937 and there was a written agreement at the time of marriage under which there was an agreement to pay Mehar to his wife of O.S. Rs. 50,000 and 500 Gold Dinars which was a deferred Mehar. Later, in discharge of the dower debt the assessee transferred in all Rs. 93,000. This amount was arrived at by considering O.S. Rs. 50,000 as equivalent to I.G. Rs. 43,000 and the value of 500 gold dinars as equivalent to I.G. Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. The assessee appealed to the AAC and contested the validity of the reopening. The AAC was of the view that the reopening was in order and agreed with the ITO that there was omission and failure to make a full and true disclosure as far as the assessments which were reopened, were concerned. 9. The assessee had also raised a plea that if in the light of the decision of the Andhra Pradesh High Court in CWT vs. Khan Saheb Dost Mohd. Alladin and another (1973) 91 ITR 179 (AP) on which the ITO relied, the assessee could not make payment of deferred dower and the said transaction was void, then the amount given to the wife would have to be considered, as an interest-free loan. The AAC held that there was a transfer of the amount of Rs. 93,000 by the assessee and it could not be classified as a loan since there was no agreement to give any loan free of interest to the wife. Thus, he upheld in each of the years the inclusion of the incomes referred to, under the provisions of s. 64 10. The assessee contests the finding of the AAC before us. The submissions of the ld. counsel in brief were that the assessments of the assessee had to be considered as a whole and that when the issue ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hen referred to the decision of the Supreme Court in CIT Kerala vs. Smt. P.K. Kochammu Ammal (1980) 19 CTR (SC) 196: (1980) 125 ITR 624) (SC) and submitted that the Court had come to the conclusion that the earlier decision in V.D.M. RM: RM Muthish Chettiar vs. CIT (Mad) (1969) 74 ITR 183 (SC) was not correctly decided. According to the ld. Deptl. Rep. Therefore, though the decision in Muthish Chettiar 's case could perhaps be relied on as authority for the proposition that an assessee was not bound to disclose income agreeable under s. 64 which accrued to his wife in his return, at least up to the asst. yr. 1972-73, in view of the later decision such an argument on behalf of the assessee would be untenable. He also submitted that if there was a conflict between the two decisions of the Supreme Court, then it was for the appellate authority to decide which was the decision which was applicable. The ld. Deptl. Rep,. further submitted that the Revenue Audit had written to the ITO on 21st April, 1976 making reference to the assessee's declaration of 27th July, 1969 that the provisions of s. 64(3) were applicable and this was followed by a letter of 10th May, 1976 where the Audit point ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sfer in liquidation of deferred dower, it was not concluded that the amount transferred would have to be considered as loan. Even if the point was not specifically argued before the High Court the ld. counsel stated that the AAC and the Tribunal being subordinate to the High Court could not consider that the decision of the High Court upholding the aggregation of wealth was not binding and the assessee could not be permitted to advance any argument to the contrary. In this regard, the ld. Deptl. Rep. made a reference to the judgment of the Karnataka High Court CIT vs. Jagdish Jakati Co, (1979) 8 CTR (Kar) 40 : (1979) 119 ITR 19 (Kar) and stated that the Court had observed that a High Court could not disregard a decision of the Supreme Court on the ground that a particular argument was not considered in it when the point at issue had been decided by the Supreme Court and on the same analogy the Tribunal could not disregard a judgment of the High Court. On merits also, therefore, he submitted the inclusion of the income was in order from year to year and deserved to be upheld. 14. We have considered the rival submissions. In order to appreciate the contentions, it is necessary to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eaving a balance of Rs. 3,500 to be discharged. As a full and final discharge of my obligation in this regard I have today paid her the balance sum of Rs. 3,500 by a cheque in her favour on 27th July, 1968 (No. HBD/H5/152119 of 27th July, 1968). With this payment I have fully discharged my obligation and she had therefore no claim over my individual properties in lieu of Mehar. Solemnly affirmed on this 27th day of July, 1968. Solemnly affirmed before me. Declaration of Mst. Zakia Vizarat Ali Khan 'I (Mrs.) Zakia Vizarat Ali Khan wife of Mr. Vizarat Ali Khan resident of Hyderabad do hereby solemnly affirm and declare as under: I have read the declaration made by my husband I hereby confirm that with the Cheque of Rs. 3,500 given by him today I have received the full amount of the Mehar and I have no right against my husband in this regard. Solemnly affirmed...................." It would be seen from the aforesaid declaration that it has been categorically mentioned that Mehar was to be a deferred one. This fact was specifically brought to the notice of the ITO therefore, by placing this declaration before him. There is also a mention of the amount paid to the wife from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt out that even for considering whether there is a mistake apparent from the record, the Courts have laid down that an ITO is not only to look to the assessment order of the relevant year, but also to assessments made in other years and all proceedings which constitute evidence and material on which the assessment order is based (See in this regard Mahendra Mills Ltd. vs. P.B. Desai AAC (1971) 79 ITR 52 (Guj), a decision which has been quoted with approval by the Andhra Pradesh High Court in Mrs Freny Rashid Chenai vs. Asstt. CED (1973) 90 ITR 31 (AP). Each year for income tax purposes is no doubt a separate proceeding. In Kikabhai Premchand vs. CIT (24 ITR 506) relied on by the ld. Deptl. Rep. it was laid down by the Court that in a particular assessment year, one could not be concerned with potential profits because such accounting period was self-contained, but that decision does not lay down any ratio which precludes consideration of the entire material before the ITO to arrive at a conclusion whether there was an omission or failure on the part of the assessee to disclose any material facts. 15. We, therefore, come to the conclusion that the assessee had placed all relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplicable to the facts of the instant case it should have said so giving reasons supporting its point of view." Muthiah Chettiar's case was a decision of three Judges of the Supreme Court. As far as the binding nature of this Judgment is concerned, we can do no better than quote the observations of Bhagwati J. in CIT vs. P.K. Kochamu Amma (a Bench of two Judges) which are as under (1980) 19 CTR (SC) 196 : (1980) 125 ITR 624 (SC) 629 630): "It is obvious that on this view the order imposing penalty on the assessee would have to be sustained but there is a decision of this Court in V.D.M. RM.M R.M. Muthiah Chettiar vs. CIT (1969) 74 ITR 183 (SC), which is binding upon us and where we find that a different view has been taken by a Bench of three Judges of this Court. It was held in this case that even if there were any printed instructions in the form of the return requiring the assessee to disclose the income received by his wife and minor child from a firm of which the assessee was a partner, there was, in the absence in the return of any head under which the income of the wife or minor child could be shown, no obligation on the assessee to disclose this item of income, and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dower in the present case was a deferred dower in terms of the Shianama. We could, therefore, hold that for the asst. yrs. 1972-73 to 1975-76, the reopening has to be sustained by having recourse to the provisions of s. 147(b) of the IT Act 1961. 20. Coming to the merits, we have the ratio of the judgment of the Andhra Pradesh High Court in CWT vs. Khan Saheb Dost Mohd. Alladdin. Their Lordships have pointed out that in the case of deferred Mehar or a dower, the same is payable only on the dissolution of the marriage or on the happening of some specified event, but not otherwise. Their Lordships have further observed that where a provision was made by parties about settlement of a part of a deferred dower, "the assesses" either of their own volition or with the consent of their wives are not entitled to make such a provision in the deeds executed by them. Such provision will be illegal and not binding on the parties and much less on the revenue". The aforesaid statement of law by the Andhra Pradesh High Court makes it clear that the terms embodied in the declaration of 27th July, 1968 which was accepted by the assessee's wife, viz., that the payments aggregating to Rs. 93,000 wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neral law or under the Mohammadan law. This is not a case where there was a gift subject to a condition which disagreed from the same and the condition would become void and the gift would take effect. To quote again from the same treatise at page 175. "All our masters are agreed that when one has made a gift and stipulated for a condition that is fasid or invalid, the gift is valid and the condition is void". The present is not such a case, because there has been no gift. 22. Under the provisions of s. 64 in so far as they are relevant, only income from what is transferred to the wife can be included. The Transfer must be one which is known to law. In the present case, we have held that there was no gift. There is no other known mode by which the assessee became divested of the ownership of Rs. 93,000 of which the wife was put in possession and which she used. We have, therefore, to hold that there was no transfer by the assessee to the wife of the amount of Rs. 93,000. At the same time, it was not the assessee's intention to use amount of Rs. 93,000 himself to acquire any the property. The wife was in possession of the money and she used the amount for acquiring property. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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