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Issues Involved:
1. Interpretation of the will of L. Acharaj Ram dated October 28, 1963. 2. Determination of whether the property devolved to the assessee in his individual capacity or as karta of the Hindu Undivided Family (HUF). Detailed Analysis: 1. Interpretation of the Will of L. Acharaj Ram: The primary issue was the interpretation of the will executed by L. Acharaj Ram on October 28, 1963. The will outlined the distribution of his self-acquired properties, including immovable and movable assets, to his family members. The interpretation of the will was crucial to determine the nature of the interest that the testator intended to confer upon his sons. 2. Capacity in Which Property Was Held: The central question was whether the properties devolved upon the assessee (one of the sons) in his individual capacity or as the karta of the HUF consisting of himself, his wife, and children. The Tribunal initially held that the properties were taken by the assessee in his capacity as karta of the HUF, but this interpretation was contested. Analysis of Judgment: Interpretation of Self-Acquired Property: The court acknowledged that L. Acharaj Ram's properties were self-acquired, giving him exclusive rights to dispose of them. The court noted that such property does not automatically become ancestral property in the hands of the son unless explicitly stated in the will. Supreme Court Precedent: The judgment referenced the Supreme Court's ruling in C. N. Arunachala Mudaliar v. C. A. Muruganatha Mudaliar, which established that a father can specify whether a gift or bequest is for the son's exclusive benefit or for the benefit of the son's family branch. The court emphasized that in the absence of clear terms, the intention of the testator must be derived from the document and surrounding circumstances. Tribunal's Interpretation: The Tribunal had concluded that the properties were taken by the assessee as karta of the HUF. However, the High Court found this interpretation flawed, noting that the will did not contain explicit terms indicating that the properties were to be treated as ancestral in the hands of the sons. Key Clauses of the Will: - Clause 7 of the Will: This clause stated that the rest of the property should be shared equally by the two sons. The court found that the language used did not explicitly partition the property for the benefit of the sons' families but rather indicated an equal division between the two sons. Counsel Arguments: - Revenue's Argument: The counsel for the Revenue argued that the will lacked clear words describing the interest the assessee was to take, and the intention of the testator should be gathered from the document and surrounding circumstances. - Assessee's Argument: The counsel for the assessee argued that the will's provisions indicated a scheme to benefit the families of the two sons, pointing to the language of clause 7 and the overall context of the will. Court's Conclusion: The court concluded that the will did not indicate an intention to treat the properties as ancestral in the hands of the sons. The testator's absolute right to dispose of his self-acquired properties and the absence of any mention of the grandsons in the will supported this conclusion. The court held that the properties were bequeathed to the sons in their individual capacities. Final Judgment: The reference was answered in favor of the Revenue, determining that the assessee held the properties in his individual capacity and not as karta of the HUF. The court made no order as to costs. Summary: The High Court of Delhi concluded that the properties bequeathed by L. Acharaj Ram to his sons were held by them in their individual capacities and not as part of the HUF. The judgment emphasized the importance of explicit terms in the will and the testator's intention, ultimately rejecting the Tribunal's interpretation that the properties were ancestral in nature. The decision was made in favor of the Revenue, with no order as to costs.
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