TMI Blog1984 (8) TMI 88X X X X Extracts X X X X X X X X Extracts X X X X ..... ght to receive privy purse, he was paid a lump sum amount of Rs. 5,11,333 ex-gratia. In these appeals, we are concerned with the income from this amount. The question before us is whether that income is to be taxed in the hands of the HUF or in the hands of the assessee. The assessee claimed that the income cannot be taxed in his hands as an individual because it belongs to the HUF. The ITO rejected this contention. 3. However, the AAC accepted it and that is how the department is in appeal before us, The AAC held that after passing of the Hindu Succession Act, 1956, the impartible character of the property was converted into HUF character, relying upon the various decisions of the Tribunal. He has relied upon two further facts : (a) that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpenses mentioned in that article. 2. The AAC should not have relied on the fact that certain amount was paid to the Maharani for her maintenance because that was not brought on record before the ITO. 3. That the assessee had made a gift of Rs. 1 lakh to the HUF, which showed that the assessee himself regarded the said amount of Rs. 5,11,333 as an individual property. 4. That the assessee should have led evidence to prove that the property in question was impartible estate and the decision in the case of Pratapsinhji N. Desai v. CIT [1983] 139 ITR 77 (Guj.), was not applicable because that decision was based on the fact that the property in question was impartible estate. He, therefore, urged that the matter should be restored to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t should be accepted. 5. He drew our attention to the AAC's order for the assessment years 1976-77 to 1979-80, where the assessee had filed an appeal on the ground that the ITO had wrongly considered the assessments in the hands of the HUF as protective. The AAC, relying upon his order for the assessment year 1976-77, held that the assessments in the hands of the HUF should be treated as regular and not protective. The assessee's advocate stated that the department had not filed any appeal over this order and so the department must be considered to have accepted the position that the income from the amount of Rs. 5,11,333 belonged to the HUF. 6. Regarding the contention of the learned departmental representative that the assessee had, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s purpose, reliance is placed on the Hindu Succession Act, by which impartible estates have been abolished so that section 27(ii) would have no application and, thus, the property would be HUF property. This approach to the problem is not correct. It is not logical to consider that if the property is not impartible, it would not be individual property. This reasoning presumes that impartible property cm never be self-acquired property, which is not so. [Reference Mulla's Hindu Law, Fifteenth edition, p. 672]. The question before us is whether the property had HUF character or not. The answer to this question must be arrived at independently of the consideration whether it is impartible property or not. Both the sides have placed reliance up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this case. That article reads as follows : " Article XIII--(1) The succession, according to law and custom, to the gaddi of each covenanting State, and to the personal rights, privileges, dignities and titles of the ruler thereof, is hereby guaranteed. (2) Every question of disputed succession in regard to a covenanting State shall be decided by the council of rulers after referring it to the High Court of Kathiawar and in accordance with the opinion given by that High Court. " In the present case, article 5 is as follows : " The Dominion Government guarantees the succession, according to law and custom, to the gaddi of the State and to the Maharana's personal rights, privileges, dignities and title. " The High Court held that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur decision cannot be based on it. Regarding the argument of Shri J.P. Shah, based on the assessee's affidavit, we have to repeat that the character of the property has to be judged by independent evidence irrespective of the assertion of any party. Regarding his argument that the department had not filed an appeal over the AAC's order dated 26-2-1983, in our view that is not necessary because the department has filed an appeal over the order, dated 22-2-1983. In the result, we hold that the income from the said amount of Rs. 5,11,333 cannot be taxed in the hands of the assessee as an individual. 8. For the assessment year 1976-77, there is an additional ground as follows : " On the facts and in the circumstances of the case and in la ..... X X X X Extracts X X X X X X X X Extracts X X X X
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