Commissioner of Income Tax vs Harish Chand Golcha

This is a reference at the instance of the Revenue u/s 256(1) of the Income Tax Act, 1961, (for short, "the Act") to decide the following question of law :

" Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the property left by a Hindu governed by the Mitakshara school of Hindu law will devolve on his widow and not to the Hindu undivided family of the only separated son and thus the income from the dividends would be assessable in the hands of Smt. Tej Kanwar and not in the hands of the assessee-Hindu undivided family ?"

The question for decision in this reference is, whether the Tribunal correctly held that dividend income in the hands of Smt. Tej Kanwar, widow of Sohan Mal Golcha, was her absolute property and was, therefore, required to be assessed on that basis ?

The Tribunal, placing reliance on the decision of the Supreme Court in Seth Badri Prasad Vs. Srimati Kanso Devi, has held that by virtue of Section 14(1) of the Hindu Succession Act, 1956, the dividend income so received by the widow during the relevant period was her absolute property and not that of the Hindu undivided family. The material facts on which the question arises may now be stated.

Sohan Mal Golcha initially was the karta of a Hindu undivided family consisting of his two sons and some other members. There was a partial partition as a result of which Sohan Mal Golcha separated from his sons. Thereafter, Sohan Mal Golcha constituted a Hindu undivided family comprising of himself, his wife and unmarried daughter, his sons having already separated. The said Sohan Mal Golcha held certain shares as an individual and this is how dividend income was assessed as his individual income after partial partition. After the death of Sohan Mal Golcha, his shares became the property of his widow alone.

The question is, whether the dividend income derived by his widow, Smt. Tej Kanwar, was her absolute property by virtue of Section 14(1) of the Hindu Succession Act, 1956, which admittedly applies to the facts of this case. The Tribunal has held that the dividend income during the relevant period was the absolute property of the widow and, therefore, it had been assessed on that basis only. No infirmity in the conclusions arrived at by the Tribunal has been pointed out by learned counsel for the Revenue. Consequently, this reference is answered against the Revenue as under:

The Tribunal was justified in law in holding that the dividend income was assessable as the absolute property of Smt. Tej Kanwar, widow of Sohan Mal Golcha.

No order as to costs.