1978 (2) TMI 136

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.... this property into the common hotch potch of HUF. Consequently, the income from property was not shown in his individual assessment. It is pertinent to mention that the assessee (HUF) was assessed from income from property for this building for the asst. yrs. 1970-71 to 1972-73 and the AO who assessed the assessee as an individual for the asst. yr. 1970-71 did not include the income from house property in the individual assessment of the assessee on the ground that the house had been thrown into the common hotch potch of the HUF on 1st Dec., 1969. However, during the asst. yr. 1972-73, the AO while making the individual assessment of the assessee perused again the declaration dt. 1st Dec., 1969 and found that the property was mortgaged to ....

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....rty. The AAC quoted the relevant portion of the letter through which the loan was granted to the assessee. Accordingly he further observed that it is apparent that the appellant had no right of transferring the property on the date when the declaration was drawn up and, therefore it, has to be held that so long as the debts are not paid in full, he continues to be the owner of the property without any right of divesting himself of this title or interest thereon and if he does so, the latter transaction is void. The AAC thereafter considered the arguments of the assessee that if the assessee has committed any branch i.e., a branch of a contract between himself and his employer and that is the matter between them and the Department being a st....

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....e of being thrown into the common hotch-potch and the second objection of the ITO was that the building was mortgaged to TISCO and, therefore, the assessee did not have any right of transfer. The counsel stated that the first objection of the ITO has not been accepted by the AAC but the AAC has accepted the second objection of the ITO and consequently, he confirmed the inclusion of income in the individual assessment of the assessee. The counsel relying in 76 ITR 675 (SC) urged that there was no transfer of asset if an individual throws his property into the common hotch-patch of HUF. Under the circumstances, the finding of the AAC on the second objection of the ITO was incorrect and consequently, the inclusion of income should be deleted. ....