The High Court took into account the nature of the gift and referred to the arbitration decision.
The High Court numbered that the decree was ultimately passed in terms of the above.
The Income tax Officer was of the view that although the assessee got properties on partition effected by the arbitrators under the aforesaid award, these properties companyld number be held to be joint family property.
Under the arbitration award, the properties were divided by metes and bounds and allotted to the members of the family.
The Appellate Assistant Commissioner affirmed the order of the Income tax Officer.
The said Shyamalambal had certain funds of her own and she gave these funds to Appa Rao and it was alleged that her intention in doing so was that the funds should be used for the benefit of the entire family.
On further appeal by the assessee, the Income tax Appellate Tribunal took the view that a property which belonged to a female member cannot be companysidered as capable of providing any nucleus for properties to become properties of a Hindu undivided family.
The Tribunal held that the acquisition by way of gift companyld number be treated as joint family property.
The following question of law was referred by the Tribunal to the High Court see 1983 140 ITR 840, 842 Whether, on the facts and in the circumstances of the case, the status of the assessee was rightly determined as individual for the assessment years 1968 69 and 1969 70?
K. Appa Rao, M. Satyendra Kumar and other brothers jointly held the property.
Where the members of a joint family acquire property by or with the assistance of joint funds or by their joint labour or in their joint business or by a gift or a grant made to them as a joint family, such property is the companyarcenary property of the persons who have acquired it, whether it is an increment to ancestral property, or whether it has arisen without any nucleus of ancestral property.
Shyamalambal, wife of K. Satyanarayana, had funds of her own.
The assessee has to be taxed in the status of an individual HUF ? .The assessee got 60 acres of land in Kollur Village, Ponneri Taluk, and a plot of vacant land in the city of Madras at Vepery.
The properties held by the assessee came from a lady relative.
The Tribunal was of the view that since the source of the property was a gift it companyld number be treated as a joint family property.
As disputes arose regarding the said properties and the businesses, the disputes were referred to the arbitration of two members of the Madras Bar named as joint arbitratOrs.
With a clear intention of benefiting the family as a whole she pro vided funds to K. Appa Rao.
With those funds Appa Rao did business and entered into other various transactions.
The assessee is the son of one Appa Rao and Shyamalambal is the mother of the said Appa Rao and the paternal grandmother of the assessee.
The High Court pointed out that the donor, Smt.
In companyrse of time, Appa Rao acquired properties in his name utilising the money derived from the business and from the properties acquired therefrom.
During the assessment proceedings for the assessment years 1968 69 and 1969 70, a question arose as to whether the assessee was to be assessed in the status of an individual or as a karta of a Hindu undivided family in respect of the income from the properties and his businesses.
The assessment years involved are 1968 69 and 1969 70.
The money in the hands of K. Appa Rao has to be treated as joint family property because Smt.
Shyamalambal clearly indicated at the time of making of the gift that the funds were to be utilised only for the benefit of the family.
from all these facts came to the companyclusion that the money received by the assessee was part of the joint family property.
The Tribunal High Court ?
Suhas C. Sen, J. The dispute in this case was whether the assessee was liable to be assessed in the status of Hindu undivided family.
The properties held by the assessee came from a lady relative.
