Family arrangement post-April 1989 not recognized, rental income assessed to Hindu undivided family.

BENGALI SINGH (HUF) Versus COMMISSIONER OF INCOME TAX AND ANOTHER

BENGALI SINGH (HUF) Versus COMMISSIONER OF INCOME TAX AND ANOTHER - [2009] 315 ITR 367 (Patna) Issues:
Assessment of rental income, Family arrangement disruption, Municipal tax receipts analysis, Challenge to court findings.

Assessment of Rental Income:
The case involved the assessment of rental income from a building shared by eight individuals. Initially, Sumitra Devi filed returns as a part owner, but scrutiny revealed that the Hindu undivided family was the actual owner. The court upheld that any partition post the family arrangement of April 1989 did not take effect, leading to the income being rightfully assessed in the hands of the Hindu undivided family.

Family Arrangement Disruption:
The appellant claimed disruption of the Hindu undivided family based on a family arrangement from 1989. However, subsequent actions, like granting a lease to Tata Iron and Steel Company, raised questions about the actual ownership. The court found that the family arrangement did not result in a partition, and the income was correctly assessed in the hands of the Hindu undivided family.

Municipal Tax Receipts Analysis:
The appellant presented municipal tax receipts in the names of six individuals, indicating separate ownership post-March 1990. However, there was a lack of evidence regarding the previous ownership or the mode of change. The court noted the absence of receipts in the name of the appellant as an individual owner, casting doubt on the claimed separate ownership.

Challenge to Court Findings:
The appellant challenged the court's findings based on various legal precedents related to partition and separation in Hindu joint families. However, the court clarified that its jurisdiction was limited to assessing the municipal receipts presented. The court refrained from entertaining challenges to the main findings, as they were under consideration by the Supreme Court. Ultimately, the review application was disposed of based on the court's findings regarding the municipal receipts.