1984 (9) TMI 120

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....ncome so included was Rs. 6,407. This assessment dated 28-2-1982 was made by the ITO, A-Ward. 4. Earlier for the assessment year 1979-80 itself, in the assessment of the wife, which was done by the ITO, E-Ward, the share income of the minor son was included. This share income has been shown by her and was assessed under the provisions of section 143(1) of the Income-tax Act, 1961 ('the Act'). 5. The assessee appealed to the AAC and it was contended that since the share income of the minor had been taxed in the hands of the assessee's wife and such assessment was not disputed by her for the year under consideration, the income of the minor should have been taxed in the hands of the wife only. The AAC held that inasmuch as the assessee ....

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....ent. The learned departmental representative relied on the decision of the Gujarat High Court in CIT v. Sumanthbhai C. Munshaw [1981] 128 ITR 142 for the proposition that where a point of defence had been abandoned by a party at a crucial stage, he could not be allowed to take up such objection later. Another contention put forth was that any objection which the assessee may have to offer against the inclusion of the share income in his hands could be considered by the appellate authority, though it was not considered by the ITO and in this regard reliance was placed on the decision of the Kerala High Court in V. Subramonia Iyer v. CIT [1978] 113 ITR 685. It was also submitted with reference to the decision of the Supreme Court in Grindlays....

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....en the subject of elaborate examination by the Gujarat High Court in the case of Mrs. J.D. Karaka, relied on by the learned counsel for the assessee. The High Court has laid down that as far as the inclusion for the first time of the share income is concerned, whether in the case of the husband or the wife, there is an ad hoc finality reached of such inclusion by the ITO, who so includes the share income in point of time earlier, i.e. an ad hoc finality is reached on the occasion earlier in point of time when one ITO decides to include the share income either in the case of the husband or in the case of the wife. Such ad hoc finality could be disturbed only by way of appeal, revision, etc., for the same year. Otherwise, according to the Cou....

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....A-Ward, acting on a subsequent date in making the assessment of the husband. Therefore, on this score, the inclusion would have to be excluded. This is the ratio of the judgment of the Gujarat High Court in Mrs. J.D. Karaka's case. Even on the point of notice which of course does not apply since the change had been proposed for the same year, the notice should have been given by the ITO assessing the wife of the assessee. Such notice has not been given because he alone could unsettle his decision. This, of course, would have been the position if a change had been proposed in the subsequent year which is not the case here. In any view of the matter, the assessee, following the ratio of the judgment of the Gujarat High Court in the case of Mr....