Commissioner of Income Tax vs M.M. Jain

J.S. Verma, C.J.—This reference u/s 256(1) of the Income Tax Act, 1961, at the instance of the Revenue is to answer the following question; namely:

"Whether the Tribunal was justified in law in holding that the self-acquired property of a father dying intestate after the coming into force of the Hindu Succession Act is to be treated as ancestral property in the hands of the son ?"

The relevant assessment year is 1978-79. The assessee acquired the property in dispute from his father who died in 1976. The assessee constituted a Hindu undivided family at the time of the death of his father. The question arose about the nature of the property and whether this property was to be treated as ancestral in his hands or not. The Income Tax Officer rejected the assessee''s contention that the property was ancestral in the hands of the assessee. The Income Tax Officer assessed the property and the income of the assessee in his status as individual and not as Hindu undivided family. The Appellate Assistant Commissioner affirmed that view. The Tribunal, on further appeal, upheld the assessee''s contention. Hence, this reference at the instance of the Revenue.

It is a settled principle of law that even the self-acquired property of a father dying intestate coming to the son is to be treated as ancestral property in the hands of the son. The Tribunal''s view was, therefore, clearly justified.

Consequently, the reference is answered against the Revenue and in favour of the assessee by holding that the Tribunal''s view was justified.

No costs.