Madhya Pradesh High Court
Commissioner Of Income-Tax vs Mrs. Banno E. Cowasji on 13 January, 1984
Equivalent citations: [1984]147ITR744(MP)
JUDGMENT Sohani, J.
1. By this reference under Section 256(1) of the I.T. Act, 1961 (hereinafter referred to as " file Act"), the Income-tax Appellate Tribunal, Indore Bench, has referred the following question of law to this court for its opinion :
" Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in deleting the income accruing to the assessee from her share of the estate of her late husband ? "
2. The material facts giving rise to this reference briefly are as follows :
The assessee is an individual and one of the heirs of one Shri E.C. Co-wasji who died intestate on December 23, 1967. The assessment years in question are 1968-69 and 1972-73. In respect of these assessment years, the ITO issued notices under Section 148 of the Act to the assessee on the ground that the income from the assessee's share in the property left by the deceased, E. C. Cowasji, was not returned by the assessee. The ITO, after hearing the assessee, included that income in the total income of the assessee. On appeal before the AAC, it was contended on behalf of the assessee that the income in question had already been assessed as the income of an AOP and as such the said income could not be again taxed in the hands of the assessee. This contention was not upheld by the AAC. However, on further appeal, the Tribunal held that in respect of the income in question, the AOP having already been taxed, the assessee could not be taxed again in her individual capacity in respect of the same income. In this view of the matter, the Tribunal allowed the appeal. Aggrieved by the order passed by the Tribunal, the Revenue sought a reference and it is at the instance of the Revenue that the aforesaid question of law has been referred to this court for its opinion.
3. Having heard learned counsel for the parties, we have come to the conclusion that this reference has to be answered in the affirmative and against the Department in view of the following observations of the Supreme Court in State of U.P. v. Raza Buland Sugar Co. Ltd., [1979] 118 ITR 50 at p. 55:
" The principle that is applicable in tax statutes is that the income is subject to tax in the hands of the same person only once. Thus, if an association or a firm is taxed in respect of its income, the same income cannot be charged again in the hands of the members individually and vice versa."
4. Now, in the instant case, it is admitted that the income in question has been taxed in the hands of the AOP consisting of the assessee and other heirs of late Cowasji. In view of the aforesaid observations of the Supreme Court, it must be held that the same income could not be again charged in the hands of the assessee. In our opinion, therefore, the Tribunal was right in deleting the income accruing to the assessee from her share of the estate of her late husband.
5. Therefore, our answer to the question referred to this court is in the affirmative and against the Revenue. In the circumstances of the case, parties shall bear their own costs of this reference.