TMI Blog1995 (12) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... s along with their father in the firm named Oriental Chemical Works, Indore. Shri Jaswantlal Jha died on August 22, 1957, i.e., after enforcement of the Hindu Succession Act, 1956. The amount standing to the credit of Jaswantlal Jha in the accounts of the firm, devolved on the assessees in equal proportion. The assessees contended that they agreed to hold such amount in the status of karta of their respective branches of the Hindu undivided family (HUF) which comprised their wives and children and thus threw it in the common hotchpotch before December 31, 1969. From 1970-71, the assessees put a note in their returns that such amount belonged to the Hindu undivided family and claimed exemption as by that time the amount of interest had becom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 ; and as Nos. 105 to 108/(Ind) of 1987, respectively, under section 27(1) of the Wealth-tax Act, 1957, before the Income-tax Appellate Tribunal, Indore, demanding reference of four questions as reiterated in these applications filed in this court, as of law for opinion. These applications were, however, dismissed by the common order on July 6, 1988. Undaunted by unsuccess, these three assessees have filed twelve separate applications, as particularised above, for each assessment year from 1980-81 to 1983-84 (four years) under section 27(3) of the Wealth-tax Act, 1957. The matter is without a conundrum. Tersely stated, the questions are whether the property, inherited from the father, was thrown into the common stock of the family before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heir of Class I thus inherits the property in his individual status and not as karta of his own undivided family because the son of a living son, i.e., grandson, is not included in the scheme of succession in terms of section 8 of the Hindu Succession Act, 1956, and Class I of the Schedule. The view of the Gujarat High Court, contrary to this position of law, is thus unhelpful to the assessees. As regards the circular, noted above, it is held in Bengal Iron Corporation v. CTO, AIR 1993 SC 2414 ; [1993] 90 STC 47 that circulars, etc., should be understood as containing the understanding of their authors and not as binding upon the courts. Section 119(1)(b) of the Income-tax Act itself clarifies that no instructions, etc., shall be issued s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of Bengal Iran Corporation's case [1993] 90 STC 47 (SC), the contention of counsel for the applicants is found to be meritless. In our view, the Tribunal committed no error of law in ignoring the circular on the conclusion that it was not a benevolent circular but based on the decision of the High Court of Gujarat which stood overruled by the Supreme Court in Chander Sen's case [1986] 161 ITR 370. In this view of the matter, the questions formulated by the applicant with regard to Circular No. 1269 is not found to be a question of law for reference and opinion. Shri Mahajan then submitted that the question of hotchpotch is decided in ignorance of cogent and convincing material on record. Shri Vyas, on the other hand, contended that this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t by the Taxation Laws (Amendment) Act, 1970, with effect from April 1, 1971, stating that income from any property thrown into the common stock of the family after December 31, 1969, shall be deemed to arise to the individual and not to the family. A similar amendment was incorporated in section 4 of the Wealth-tax Act by the insertion of sub-section (1A) by the Finance (No. 2) Act, 1971, with effect from April 1, 1972, providing for the consequence of conversion of the properties after December 31, 1969. The exact date of throwing into common stock, however, does not seem to have been asserted. The plea emerging from record is that it was thrown before December 31, 1969. It is contended that (i) note was put in the returns showing such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esults in miscarriage of justice. This contention is opposed. However, the conclusion gives rise to a referable question. It is contended that question about the tainted finding needs to be referred and answered one way or the other, after a scrutiny of the orders. it is argued that the conclusion, when branded as unsupportable and perverse, becomes a question of law. In our view, this limited question. in the instant case should be permitted to prevail. The answer, however, would depend on the examination of the entire material which can be undertaken only when such a question is before us for opinion. In our view the proposed questions Nos. 1, 2 and 4 are not questions of law. As regards question No. 3, we find that it needs to be res ..... X X X X Extracts X X X X X X X X Extracts X X X X
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