TMI Blog2004 (12) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... unal has correctly held the status of the assessee to be body of individuals. – Both questions are answered in the affirmative, i.e., in favour of the assessee and against the Revenue. - - - - - Dated:- 9-12-2004 - Judge(s) : D. A. MEHTA., MS. H. N. DEVANI. JUDGMENT The judgment of the court was delivered by D.A. Mehta J.- The Income-tax Appellate Tribunal, Ahmedabad Bench, has referred the following two questions under section 256(1) of the Income-tax Act, 1961, ("the Act"), at the instance of the Commissioner of Income-tax, Gujarat-III, Ahmedabad: "1. Whether the Appellate Tribunal is right in law in setting aside the order made by the Commissioner of Income-tax under section 263 of the Income-tax Act, 1961? 2. Whether the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g counsel appearing on behalf of the applicant-Revenue, submitted that the Tribunal had erred in accepting the stand of the assessee. That as per declaration of the donor, executed on June 21, 1981, the donees were only entitled to distribute amongst themselves the gifted property. The moment the donees came together to earn income from the gifted amount, their action gave rise to a situation where-under they were required to be assessed under the Act in the status of association of persons. He, therefore, urged that the order of the Commissioner of Income-tax be upheld. In support of the submission, reliance was placed on the decision in the case of Meera and Co. v. CIT [1997] 224 ITR 635 (SC) to contend that once there was an organised ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Assessing Officer is unsustainable in law. Applying the aforesaid tests, it is apparent that in the facts of the present case, it is not possible to state that the view adopted by the Assessing Officer is unsustainable in law in the light of the decision of the apex court in the case of Meera and Co. [1997] 224 ITR 635. In the case of Meera and Co. the apex court was called upon to decide as to what would be the correct status of the assessee, whether body of individuals or association of persons. One individual expired intestate leaving behind his mother, widow and minor children. They inherited the business carried on by the deceased individual. After the mother relinquished her share, the widow continued the business, but claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... donor under a declaration dated June 21, 1981. The said sum was invested by them and interest income returned in the status of body of individuals. Thus, the facts are similar to the situation which was prevalent before the apex court in the case of Meera and Co. [1997] 224 ITR 635. Applying the said ratio, it is apparent that the Tribunal has correctly held the status of the assessee to be body of individuals. In the result, question No. 1, referred to the court, is answered in the affirmative, i.e., in favour of the assessee and against the Revenue. Similarly, question No. 2 is also answered in the affirmative, i.e., in favour of the assessee and against the Revenue. The reference stands disposed of accordingly. There shall be no order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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