TMI Blog1993 (3) TMI 78X X X X Extracts X X X X X X X X Extracts X X X X ..... he Income-tax Act, 1961?" This reference relates to ten assessment years and arises from two common orders of the Tribunal disposing of ten appeals of the assessee relating to his assessments for the years 1959-60 to 1969-70 excluding, however, assessment year 1962-63. One of the common orders relates to five assessment years from 1959-60 to 1964-65 and it is dated September 25, 1970. The other common order dated September 29, 1970, relates to five assessment years, viz., 1965-66 to 1969-70. The assessee is Shri Kanchanlal Vadilal, son of Shri Vadilal Chunilal. He is a partner along with his father and others in the firm of Messrs. Kanchanlal Vadilal and Co. Shri Vadilal had a wife Vasantibai by whom he had no issue. She had, however, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -------------------------------------------------- Assessment year Wife Minor son Total --------------------------------------------------------------------------------------------------------------------------------------------------- Rs. Rs. 1959-60 6,000 3,000 9,000 1960-61 6,000 3,000 9,000 1961-62 6,000 3,000 9,000 1963-64 9,000 4,500 13,500 1964-65 9,000 4,500 13,500 1965-66 9,000 4,500 13,500 1966-67 9,000 4,500 13,500 1967-68 9,000 4,500 13,500 1968-69 9,000 4,500 13,500 1969-70 9,000 4,457 43* 13,500 --------------------------------------------------------------------------------------------------------------------------------------------------- (*This difference of Rs. 43 remains unexpla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... othari's case [1963] 49 ITR 107 (SC). Learned counsel for the assessee placed heavy reliance on the decision of this court in Wadilal Chunilal's case [1963] 47 ITR 305. The contention of learned counsel was that the law laid down by this court in the above case was not affected in any way by the decision of the Supreme Court as is evident from the subsequent decision in H. N. Patwardhan's case [1970] 76 ITR 279 (Bom). Learned counsel relied on the following observations of this court in Wadilal Chunilal's case [1963] 47 ITR 305, 310 : "In the case before us the transfers are not simultaneous. The gift by the son in favour of the step-mother is nearly five months after the gifts by the father in favour of the son's wife and child. There ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rises to her from assets transferred by the husband." Referring to the facts of the case before it, the Supreme Court observed (at page 110) : "The present case is an admirable instance of how indirect transfers can be made by substituting the assets of another person who has benefited to the same or nearly the same extent from assets transferred to him by the husband." The Supreme Court also considered the contention of the assessee in that case that even if chain transactions are included, then also unless there is consideration for the transfer by the husband, each transfer must be regarded as independent, and as in the case before it the Department had not proved that the transfers by the son to the mother and by the father-in-law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsferred directly or indirectly to the wife'." In view of the above observations, the Supreme Court held that the High Court was in error in ignoring the above pertinent matters. The Supreme Court observed (at page 111) : "It is reasonable to infer from the facts that before the respective husbands paid the amounts, they looked up the law and found that the income of the property would still be regarded as their own income if they transferred any assets to their wives. They hit upon the expedient that the son should transfer the assets to his mother, and the father-in-law, to the daughter-in-law, obviously failing to appreciate that the word 'indirectly' is meant to cover such tricks." The Supreme Court held the transfers to be indire ..... X X X X Extracts X X X X X X X X Extracts X X X X
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