AJIT K. SENGUPTA, J.

( 1 ) IN this reference under Section 256 (2) of the Income-tax Act, 1961, for the assessment years 1958-59 and 1959-60, the following question of law has been referred to this court :"whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the income from the remaining one-fourth share in the properties as described at Schedule-B to the assessment order for the assessment year 1959-60 was not assessable in the hands of the assessee. Hindu undivided family and in directing exclusion of the said income from total income of the assessee's family ?"the material facts bearing on the question referred to us are stated hereafter.

( 2 ) THE assessee family is governed by the Dayabhaga school of Hindu law. Formerly, the entire property belonged to a Hindu undivided family which consisted of four brothers, Satindra, Narendra, Prafulla and Radheshyam. Satindra died leaving behind him his two sons, Bhairab and Gopal. Thereafter the Hindu undivided family consisted of five members, namely, Bhairab and Gopal, the sons of Satindra (deceased) and their uncles Narendra, Prafulla and Radheyshyam. There is no dispute that, till before the previous year 1364 B. S. relevant for the assessment year 1958-59, the properties mentioned at Schedule 'b' to the assessment order of the Income-tax Officer for the year 1958-59, belonged to this Hindu undivided family. In the previous year 1364 B. S. , Radheyshyam Panja gifted his undivided one-fourth share in the Schedule 'b' properties to his son, Jailal. The Income-tax Officer included the income from the remaining three-fourths share of the said properties in the total income of the assessee family.

( 3 ) THE assessee's contention is that the three-fourths of the Schedule 'b' properties remaining after the gift of Radheyshyam Panja did not belong to the Hindu undivided family constituted of the five-members aforesaid, namely, Bhairab, Gopal, Narendra, Prafulla and Radheyshyam, for the simple reason that Radheyshyam did not have any interest in the Schedule 'b' properties after the gift made by him. According to the assessee's representative, the remainder of the Schedule 'b' properties belonged to a new smaller Hindu undivided family constituted of Bhairab, Gopal, Narendra and Prafulla. In any event, he contended that the assessment of the income from the three-fourths share of the property in the hands of the assessee-Hindu undivided family was illegal.

( 4 ) IT was contended that the bigger Hindu undivided family consisting of five members not being the owner of the remainder of the Schedule 'b' properties, after the gift, was not assessable under Section 9 in respect of the income therefrom. He also contended that, in any event, the shares of the different members of the family in the said property being definite and ascertainable, the case would be governed by Section 9 (3) of the Indian Income-tax Act, 1922, and, therefore, the income from the Schedule 'b' property remaining after the gift would not be assessable in the hands of the Hindu undivided family. He argued that the individual members of the family were, in view of the specific terms of Section 9 (3), liable to be assessed on their respective shares in such property separately. He relied on the decision of the Calcutta High Court in the case of Biswa Ranjan Sarvadhikary v. ITO [1963] 47 ITR 927.

( 5 ) FOLLOWING the said judgment in the case of Biswa Ranjan Sarvadhikary [1963] 47 ITR 927 (Cal), the Tribunal held that the income from the remainder of the Schedule 'b' property was not assessable in the hands of the appellant family and it should be excluded from its total income for both the years under appeal, as the appeals were directed against the assessment in relation to Schedule 'b' properties only. The Tribunal, however, did not make any observation as to the assessments made in respect of other properties.

( 6 ) THE contention of the Revenue is that though the share

Click Here to Read the rest of this document