Per Shri A.V. Balasubramanyam, Judicial Member - These appeals are by the assessee. The assessment years are 1980-81 and 1981-82.

2. A certain Nariman Irani, who was dealing in the business of film. production, died on 10-12-1977 leaving him surviving a widow (Salma Irani), two minor sons, a minor daughter and mother. Nariman Irani was a Parsi. His wife, Salma Irani, was a Muslim. The succession to the property left behind by Nariman Irani was governed by the provisions in Chapter III of the Indian Succession Act, 1925.

3. Nariman Irani had produced a film in regard to which he had granted distribution rights to several parties. The distribution was subject to minimum guarantee and during the lifetime of Nariman Irani, he had received what was receivable as minimum guarantee. After his death, the film had earned some excess income and as a result thereof, the distributors had to pay a percentage of the income, according jo the contract they had made with the deceased. That is how Salma Irani had received money from various distributors after the death of Nariman Irani. We may here note that there were debts which Nariman Irani had to pay.

4. Nariman Irani died intestate. Salma Irani applied and obtained from the Bombay High Court letters of administration on 22-12-1982 and in regard to property and credits of her deceased husband, Nariman Irani.

5. The ITO had passed assessments against Salma Irani in her capacity as administrator of the estate of late Nariman Irani under section 143(3), read with section 144B of the Income-tax Act, 1961 (‘the Act’). From them there were appeals to the Commissioner (Appeals) wherein the primary contention was that the assessments made against Salma Irani as adiministrator of the estate of Nariman Irani were bad and that the income should have been assessed in the hands of the legal heirs of the deceased in proportion to their, share of interest. More simply, the contention was that the ITO should not have applied the provisions of section 168 of the Act in passing a single assessment against Salma Irani in her representative capacity. There were other contentions too touching merits. The Commissioner (Appeals) rejected all the pleas advanced on behalf of the assessee and dismissed the appeals.

6. Shri Y.P. Trivedi, the learned counsel for the assessee, contended that the assessments made in this case applying section 168 are not valid and that the income should have been directly assessed in the hands of the heirs in proportion to their share of interest and, in this connection, he greatly depended upon the judgment of the Bombay High Court in the case of CWT v. Keshub Mahindra [1983] 139 ITR 22. The rejoinder of Shri Tuli, the learned departmental representative, was that Salma Irani having obtained letters of administration in regard to the estate of her deceased husband cannot now be allowed to say that she is not administering the estate of her deceased husband, particularly so when there were debts repayable out of the assets of the deceased. He placed dependence upon the judgment of the Bombay High Court in the case of CIT v. Mrs. Usha D. Shah [1981] 127 ITR 850 and the judgment of the Karnataka High Court in the case of Estate of Late H.H. Rajkuerba, Dowager Maharani Suheb of Gondal v. CIT [1982] 135 ITR 393 to contend that section 168 has application to this case. We must note here that the Commissioner (Appeals) relied upon these two later mentioned case law to reject the contention on behalf of the assessee.

7. Arguments were addressed on the merits of the assessments regarding which reference will be made later.

8. Facts are perfectly clear. Upon the death of Nariman Irani, his. property was inherited by the wife (Salma Irani), three minor children and mother according to the provisions in Chapter 111 of the Indian Succession Act since the deceased had not left a will. As a consequence, the property immediately vested in the heirs according to law of inheritance governing them an