On October 7, 1947, the firm entered into an agreement for the purchase of a house in Sterling Road, Madras, for Rs.90,000, and the same day paid an advance of s.5,000.
In this way both the ladies received from the firm Rs.
It was stated to be a birthday gift by him to his mother.
In 1947, the firm companysisted of C.M. Kothari and his two sons, C. Kothari and H. C. Kothari Their respective shares were 6 5 5.
The ladies issued the cheques on their accounts into which were paid by the firm, certain amounts by cheques.
Into Mrs. C.M. Kotharis account was paid an amount of Rs.27,000 which was debited on October 24, 1947 to D.C. Kothari.
Appeals from the judgment and order dated March 25, 1958, of the Madras High Court in Case Referred No.
The appeals of the assessee to the appellate Assistant Commissioner failed as also those filed before the Tribunal.
1600 Thus the two ladies paid one third share of Rs.85,000 and the amounts which were respectively paid by their husbands as part of the earnest money.
Each of the two ladies paid to the firm a cheque of Rs.28,333 5 4.
30,000 which was the exact one third share of the companysideration of Rs.90,000, but the amount was number paid by their respective husbands, but by the son in one case, and the father in law,, in the other.
Gopalakrishnan, for the respondent.
N. Rajagopal Sastri and R. N. Sachthey, for the appellant.
This was debited to the account of C, M. Kothari and was shown as a gift by him to his daughter in law.
CIVIL APPELLATE JURISDICTION Civil Appeals Nos.
The Income Tax Officer also found that in the past, the father in law bad never given such a big present to his daughter in law on Dewali and this time there was numberspecial circumstance to justify it.
The judgment of the Court was delivered by HIDAYATULLAH J. The High Court of Madras in a Reference under s.66 1 of the Indian Income Tax Act, answered in the negative the following question Whether there was material for the Appellate Tribunal to hold that the income arising to Mrs. C.M. Kothari and Mrs. D. C. Kothari from the property arose indirectly out of the assests transferred indirectly by their husbands so as to attract the provisions of s.16 3 a iii .
In the assessment years 1948 49, 1950 51 and 1951 1952, the Income Tax Officer assessed the incomefrom the one third share of the house received by Mrs. C.M.Kothari as the income of her husband.
H.C. Kothari was debited with a further sum of Rs.28,333.5 4.
1,800, and Mrs. D.C. Kothari paid another cheque of Rs.
12 of 1954.
Messrs Kothari and Sons is a firm of stock brokers.
Mrs. C.M. Kothari further paid a cheque of Rs.
This was on the ground that because of the interchange of the money in the family, either the purchases were made by the donors benami in the names of the donees, or alternatively, from assets transferred indirectly by the husband to the wife in each case.
34 to 36 of 1962.
March 26.
The Income Tax Officer pointed out that the birthday of Mrs. C. M. Kothari had taken place earlier in the year and there was numberoccasion to give a birthday present to her several months later and on a date companynciding with the purchase of this property.
In our opinion, these appeals by the Commissioner of Income tax.,
Similarlyin the four assessment years 1948 49 to 1951 52, the income of Mrs. D. C. Kothari from this house was assessed as the income of her husband.
Similarly, on November 13, 1947 Mrs. D. C. Kotharis account with the bank was credited with a sum of Rs.30,000 by a cheque issued by the firm.
On November 13, 1947, another amount of Rs.
3,000 was paid into Mrs. C. M. Kotharis account which was debited to the account of D. C. Kothari as a gift by him to his mother for Dewali.
Rs.5,000 The transaction was companypleted on October 24, 1947.
In this way, Mrs. C. M. Kothari pad Rs.200 more than the other two, because her husband had previously paid Rs.200 more than his sons.
This sum was debited in the books of the firm to the accountsof the three partners as follows M. Kothari Rs.1,800 C. Kothari Rs.1,600 C. Kothari Rs.1,600 Total.
The share of the three vendees was however, Shown to be one third each.
The sale deed, however, was taken in the names of Mrs. C.M. Kothari Mrs. D.C. Kothari and H.C. Kothari.
The balance of the companysideration was paid to the vendors by the firm.
