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TMI Blog1968 (12) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... ed family which originally consisted of one Girdharlal Trikamlal and his three sons, Dhirajlal, Hiralal and Kirtilal. Girdharlal passed away on 26th July, 1942. During the lifetime of Girdharlal he was a partner in a firm known as Girdharlal Trikamlal & Co. His eldest son, Dhirajlal, was also a partner in that firm. On the death of Girdharlal on 26th July, 1942, that partnership was dissolved and a new firm comprising Dhirajlal and his younger brother, Hiralal, came into existence. That firm took over all the assets and liabilities of the former firm of Girdharlal Trikamlal & Co. On the date of Girdharlal's death there was standing to the credit of his personal account with the partnership firm a sum of Rs. 25,31,999. The firm, therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture of capital receipts. The department took the matter in appeal to the Tribunal and the Tribunal by an order passed on the 1st August, 1951, reversed the decision of the Appellate Assistant Commissioner and restored that of the Income-tax Officer. They held that the transfer was effected with the object of evading income-tax and the very fact that the shares were transferred, and that too a substantial holding of the firm, indicated conclusively that the object of the transfer was to evade income-tax; that the Hindu undivided family (the assessee) did not take the shares as the return of its capital; that the shares did not remain with the Hindu undivided family for a considerable time but they disposed of them soon after, and that takin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... say to what extent the mind of the court was affected by the irrelevant material used by it in arriving at its finding. Such a finding is vitiated because of the use of inadmissible material and thereby an issue of law arises." Upon that view the Supreme Court framed the question: "Whether the finding of the Tribunal is not vitiated by reason of its having relied upon suspicions and surmises not supported by any evidence on the record or upon partly inadmissible material?" and remanded the case to the High Court with a direction that the High Court should ask the Tribunal to state a case. On receipt of this order a Division Bench of this court passed an order on the 22nd August, 1956, calling for a fresh finding from the Tribunal (vide an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nature of trade. All that we have to ascertain is whether the assessee-Hindu undivided family carried on a business in shares. If the assessee had not made any purchases, the question of dubbing him with the stamp of a share-dealer would not arise. The difficulty has only arisen in view of the fact that the assessee in the first year purchased shares of the value of over Rs. 2 lakhs. The Income-tax Officer may say that the purchase of new shares indicates that the assessee had converted his holding of shares into his stock-in-trade. But considering the meagre purchases made thereafter, we do not think that would be a correct finding. Speaking for ourselves, we have our doubt as to the genuineness of the transfer to the Hindu undivided fami ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e us. In this order the Tribunal has done nothing more than to refer to its earlier order passed on 1st August, 1951, for the assessment year 1944-45. On the date on which the order under reference was passed it appears that the appeal before the Supreme Court in the assessment year 1944-45 was pending. In fact it is so stated in the order under reference itself. In passing the order under reference the Tribunal did not go into the question arising before them at all. On the contrary, it has expressly stated in its order: " The question involved is the same as involved in I.T.A. No. 1178 of 1950-51 against the assessment made on the assessee for the year 1944-45." Counsel on behalf of the assessee wished to argue the matter before the Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not a legal inference. The Tribunal shall give a fresh finding on the question. The Commissioner to pay the costs of this reference.In stating the case, the Tribunal has in paragraph 13 of the statement referred to the decision of the Tribunal in two of the assessee's appeals to the Tribunal for the years 1947-48 and 1948-49, and stated that on the same points as are before us the Tribunal held in favour of the assessees and has also annexed that order of the Tribunal dated 15th September, 1960, as annexure "F". Strong exception has been taken on behalf of the department to this portion of the statement of the case. It does appear to as that the reference to the orders for the subsequent years was entirely irrelevant and should not have ..... X X X X Extracts X X X X X X X X Extracts X X X X
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