Court affirms 1/3 income share in property dispute.

The court upheld the assessee's claim for a 1/3rd income share in the property allocation dispute of S.C.O. No. 85-86 Sector 17 'C', Chandigarh. Despite allegations of collusive decree and tax implications, the court relied on the family settlement and civil court decree determining the 1/3rd shares for the assessee, his wife, and son. The Tribunal found the court decree legally binding, overriding the revenue's arguments, and allowed all three appeals in favor of the assessee, confirming the 1/3rd income allocation.

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Issues:
1. Dispute over property income allocation - 1/3rd vs. 78%.
2. Inconsistent stand by assessee regarding property share.
3. Family settlement and court decree determining property shares.
4. Allegations of collusive decree and tax implications.
5. Interpretation of court decree and its effect on income allocation.

Detailed Analysis:
1. The dispute in the appeals pertains to the allocation of property income of S.C.O. No. 85-86 Sector 17 'C', Chandigarh, with the issue being whether 1/3rd income or 78% should be added to the assessee's hands. The ITO and AAC added 78%, but the assessee claimed a 1/3rd share based on a family settlement. The appeals were consolidated for hearing due to the common issue.

2. The facts reveal an inconsistent stand by the assessee regarding the property share, with the assessee, his wife, and son jointly constructing the property. The revenue based the income division on their investment contribution. The assessee claimed a 2/3rd share initially but later asserted an equal 1/3rd share based on a family settlement.

3. A family settlement on 20th Nov., 1970, determined equal shares for the assessee, his wife, and son. A civil court decree in 1973 confirmed 1/3rd shares for the wife and son. The revenue doubted the settlement's legitimacy, alleging collusion, and taxed the assessee at 78%.

4. The revenue contended that the family settlement was a fabrication and the court decree collusive. The assessee's inconsistent stands were highlighted, questioning the settlement's validity. The revenue's position was that the 78% allocation was justified based on the assessee's conduct and documentary evidence post-settlement.

5. The Tribunal accepted the assessee's claim based on the court decree, emphasizing that the decree remained unchallenged and legally binding. The court order determined the 1/3rd share for the assessee, overriding other contentions. The effective date of the share allocation was upheld as per the court judgment, starting from 20th Nov., 1970. Ultimately, all three appeals of the assessee were allowed, confirming the 1/3rd income share.

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