TMI Blog1988 (8) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... ases by its order dated November 28, 1973, in 1. T. A. No. 5610 (Gau) of 1971-72 for the assessment year 1963-64 and order dated June 7, 1979, in I. T. A. Nos. 682 and 683 (Gau) of 1975-76 for the assessment years 1972-73 and 1973-74 sustaining the application of section 64(1)(iii) of the Income-tax Act, 1961, which is identical to section 4(1)(a)(i) of the Wealth-tax Act, 1957, and whether the decision based on a contrary view taken by the Tribunal in the case is tenable in law ?" The building referred in the first question bears No. 69 in Purnadas Road, Calcutta-29. The assessee in this reference is N. R. Sirkar. Rama Sirkar is the spouse of the assessee. She purchased the land on September 9, 1959, for Rs. 24,700. The construction of the building commenced on April 15, 1960, and completed in four years by March, 1964. The plinth area of the building is 4,824 sq. feet. The assessee advanced amounts on different dates in between the four years, Rs. 18,500 in 1959-60 and Rs. 1,46,617 was advanced as loans to her in the calendar years 1960-62. The amount spent by her on the building was Rs. 1,78,821. She invested her stridhana gifted by her parents and relatives amounting to Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ples of res judicata and estoppel are not at all applicable in tax jurisprudence. The orders in taxation proceedings and the enquiries held are concluded every year is accepted as axiomatic we intend to review cases in this reference (sic). We see in M. M. Ipoh v. CIT [1968] 67 ITR 106, the Supreme Court held that the doctrine of res judicata is not applicable. The assessment made in one year does not bind the assessment in the succeeding year. The facts found are conclusive only in the year of assessment when findings are recorded. Such a finding surely is cogent evidence or may even be guide in a subsequent years, when the same question or a similar question falls to be determined in another year, but nevertheless it is accepted as not binding and not conclusive. In CIT v. Brij Lal Lohia and Mahabir Prasad Khemka [1972] 84 ITR 273 (SC), the application of the principle of res judicata was adverted to. This case is more on facts but it is a case where because of availability of evidence which was shown not to have been available in the preceding year and because of the surfeit of evidence in the year in question the conclusion was varied. The importance of this case is that reas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rinciple of natural justice was referred to and it was held that if there was a prior determination by the income-tax officials, ordinarily there should be no variation from that decision unless there are fresh circumstances to warrant a deviation from the previous decision. The Bombay High Court considered a like question in H. A. Shah and Co. v. CIT / EPT [1956] 30 ITR 618. In that case, the principles of res judicata and estoppel were elucidated including the Madras Full Bench case. It was emphasised, on facts, that the conclusion reached in the preceding year was not determinative and final and conclusive in relation to the assessment for that year. A decision in an earlier year is not binding in a subsequent year. In that case, what are the constraints were stated as limitations. There should be finality and certainty in revenue proceedings, it was emphasised, like all litigations including litigation arising out of the Income-tax Act. A decision on a question cannot be reopened unless that decision is arbitrary or perverse. If no fresh facts are there, the earlier decision should be followed. Finally, it was stated that the effect of revising a decision in a subsequent year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question and therefore the principles of res judicata cannot apply". We consider these facts necessary to understand the decision of the Privy Council ; otherwise, the decision in that case ex facie or at the first blush appears contrary to another case rendered a year later by the Privy Council The latter case, Hoystead v. Commr. of Taxation [1926] AC 155, shows that the earlier decision was as to the status of six daughters of a testator under a trust created by him in the last testament and as to whether the six of them were joint owners or owned their shares as six individuals. If they were individual owners, they were entitled to separate deductions as against the charging authority. The Full Court of the Australian High Court held that the daughters were not joint shareholders. In a subsequent year that conclusion was departed from. The Privy Council held "very numerous authorities were referred to. In the opinion of their Lordships, it is settled, first, that the admission of a fact fundamental to the decision arrived at cannot be withdrawn and a fresh litigation started, with a view to obtaining another judgment upon a different assumption of fact ; secondly, the same prin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, it is argued, the facts in the case show that the assessee advanced the money. The law and practice in this country is that the beneficiary of a trust owns the property. Therefore, it is urged in the instant case that there is an indirect transfer within the meaning of section 4 of the Wealth-tax Act, 1957. Therefore, the assessee is the owner of the building. His spouse is not a debtor. We see that in the UK where the theory of advancement operates, there is a presumption in favour of the person for whose benefit advancement is made. Such a presumption is not accepted in India. Section 82 of the Indian Trusts Act (II of 1882) is apposite in this regard which reads : "Where property is transferred to one person for a consideration paid or provided by another person, and it appears that such other person did not intend to pay or provide such consideration for the benefit of the transferee, the transferee must hold the property for the benefit of the person paying or providing the consideration." In India, if property is purchased in the name of a person often referred to as the ostensible owner, such a person is not the owner. The person who advances the money is held to be t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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