The main legal point established in the judgment is that the provisions of the Hindu Succession Act do not alter the character of inherited property in the hands of the son, emphasizing the continuity of the old Hindu law principles.

JUDGMENT :

B. J. Divan, J.

In this reference, at the instance of the revenue, the following question has been referred to us for our opinion:

"Whether, on the facts and in the circumstances of the case, the correct status of the assessee in respect of the properties inherited by him on the death of his father was as representing his Hindu undivided family or as an individual ?"

2. The facts giving rise to this reference are as follows: The assessment years under consideration are 1966-67 and 1967-68. The assessee who seems to have died during the pendency of the proceedings was one Dr. Babubhai Mansukhbhai. The assessee's father, Mansukhbhai, died intestate on October 8, 1963, leaving certain self-acquired properties. On the death of Mansukhbhai these self-acquired properties devolved upon his widow and his son, that is, the assessee. The properties left by the deceased father of the assessee consisted of loans advanced by the deceased to certain parties and also bank deposits. The assessee inherited one-half share of the said loans and bank deposits. Income by way of interest on the one-half share amounted to Rs. 4,588 in the year of account relevant to assessment year 1966-67 and to Rs. 4,986 in the year of account relevant to assessment year 1967-68. The assessee contended before the Income-tax Officer that the interest income should be assessed as income of the Hindu undivided family consisting of the deceased himself, his sons and his wife. The Income-tax Officer rejected the contention of the assessee and following the decision of the Allahabad High Court in Commissioner of Income-tax v. Ram Rakshpal, Ashok Kumar [1968] 67 ITR 164 (All) held that since the father had his individual properties, the question of treating the said individual properties in the hands of the assessee as Hindu undivided family properties did not arise. According to the Income-tax Officer, the Mysore High Court in the case of Commissioner of Income-tax v. Smt. Nagarathnamma [1970] 76 ITR 352 (Mys) had also confirmed the view of the Allahabad High Court. Consequently, the Income-tax Officer assessed the income from interest in the hands of the assessee as his individual income and not the income of the Hindu undivided family. Against the decision of the Income-tax Officer, the matter was taken in appeal by the assessee but the Appellate Assistant Commissioner confirmed the order of the Income-tax Officer and dismissed the appeal. Against the order of the Appellate Assistant Commissioner, the matter was taken in further appeal by the assessee to the Income-tax Appellate Tribunal and it was urged before the Tribunal on behalf of the assessee that, according to the principles of Hindu law as applicable prior to the passing of the Hindu Succession Act, all properties inherited by a Hindu male from his father are ancestral property in his hands as between himself and his male issues. It was also contended that under section 4(1)(a) of the Hindu Succession Act, the provisions of Hindu law would continue to apply for determining the nature of the property inherited by his son from his father qua his male issues. On behalf of the revenue it was submitted that in view of the decisions of the Allahabad High Court and Mysore High Court referred to above, the position in law was well-settled. The Tribunal held that the Income-tax Officer had erred in assessing the income from properties inherited by the assessee on the death of his father in the individual assessment of the assessee. The Tribunal held that this income from interest could not be assessed in the hands of the assessee in his individual capacity but it could be assessed in his hands as representing the Hindu undivided family. Thereafter, at the instance of the revenue, the above question has been referred to us. In Commissioner of Income-tax v. Ram Rakshpal, Ashok Kumar [1968] 67 ITR 164 (All), the learned judges of the Allahabad High Court were concerned with the following facts. One Durga Prasad an