Section 176 — the law in short
What the courts have decided on section 176, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.
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CIT v Amarchand N. Shroff
Supreme CourtHelps taxpayerValidity unconfirmed
My father died and, years later, his firm's old fees kept coming in to us. Can the department tax those receipts as his income in our hands?
No, on the law as it then stood. The Supreme Court held that the provision making a legal representative liable for a deceased person's tax extends the deceased's legal personality only for the previous year in which he died. Income received by his heirs after the end of that previous year is not income received by him and cannot be assessed in their hands under that provision. Amarchand died on 7 July 1949; realisations of the firm's old outstandings received in the five assessment years 1950-51 to 1954-55 were therefore not taxable as his income. A legal fiction is limited to the purpose for which it was created.
Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.