1997 (11) TMI 84 - HC - Income Tax

Summary

Issues Involved:
1. Determination of whether the property passed on the death of the deceased belonged to the joint family or to the individual.
2. Interpretation of the will and its impact on the nature of the property.
3. Examination of the legal principles regarding the blending of self-acquired property with HUF property.
4. Analysis of the existence of joint family property as a requisite for blending.

Issue-wise Detailed Analysis:

1. Determination of whether the property passed on the death of the deceased belonged to the joint family or to the individual:
The core issue was to ascertain whether the property passed on the death of the deceased was part of the joint family property (HUF) or was individual property. The respondent, the accountable person, claimed that the property belonged to the HUF based on the declaration in the will. The Assistant Controller of Estate Duty (ACED) initially rejected this claim, but the Appellate Controller and the Tribunal later accepted it, leading to the current reference.

2. Interpretation of the will and its impact on the nature of the property:
The will, executed on 22nd September 1967, played a crucial role in determining the nature of the property. The deceased declared that he and his sons constituted a joint HUF and that all his properties were thrown into the common hotchpot of the HUF. The will also specified that his daughters would not have any share in these assets. The Tribunal and the High Court had to interpret the will to understand the deceased's intention, which was found to be an unequivocal declaration that the properties were to be treated as HUF properties.

3. Examination of the legal principles regarding the blending of self-acquired property with HUF property:
The case heavily relied on the precedent set by the Madras High Court in CIT vs. A.R. Sahasranamam, which allowed for the declaration that individual property could be impressed with the character of HUF property through a will. The High Court reaffirmed that the intention of the deceased, as expressed in the will, was to treat his property as joint family property, which is legally permissible.

4. Analysis of the existence of joint family property as a requisite for blending:
The Revenue argued that blending requires the existence of joint family property. However, the High Court referenced various legal authorities, including the Supreme Court and the Privy Council, to establish that the existence of joint family property is not a prerequisite for blending. The court cited Mayne's Hindu Law and Usage and other judgments to support that a joint family can exist without possessing joint property, and that the declaration in the will was sufficient to impress the individual properties with the character of HUF properties.

Conclusion:
The High Court concluded that the property which passed on the death of the deceased belonged to the joint family and not to the individual. The question referred to the court was answered in favor of the accountable person and against the Revenue. The court emphasized that the recitals in the will clearly indicated the deceased's intention to treat his properties as HUF properties, and this intention must be given effect. The court also dismissed the Revenue's argument regarding the necessity of existing joint family property for blending.