1971 (10) TMI 33 - SC - Indian Laws

Whether the income of the properties put in possession of the male members under the karar of 1909 continues to be the income of the family? Held that - On an examination of the various clauses in the karar it is obvious that the joint status of the parties was not disrupted. The arrangement made in the karar was only an arragement for providing maintenance. No party was given any absolute right in any portion of the family properties. The properties mentioned in the karar continued to be the properties of the family. The arrangement made under the karar cannot even be considered as a permanent arrangement. The properties were not divided on the basis of tavaies. The liability to maintain the male members aged more than 21 years excepting parties Nos. 2 3 and 4 continued to be that of the karnavan. The karar also does not provide for devolution of the properties allotted to parties Nos. 2 to 4. Hence those properties must necessarily go back to the possession of the karnavan after those members die. We have earlier seen that the responsibility of performing the marriage ceremonies of the female members continued to be that of the karnavan. He is also responsible for the payment of land revenue in respect of the family properties excepting properties included in schedule A to the karar. Under these circumstances it is not possible to hold that the karar in question embodied an irrevocable settlement In the. every nature of things the arrangement made under that karar must be held to be one which is revocatole if there is any substantial chaw in the circumstances of the family. For our present purpose it is sufficient if we hold that the properties allotted for the enjoyment of the various members of the family under the karar continued to be the properties of the family.

Summary

Issues Involved:
1. Whether the family karar of 1909 constitutes a diversion of family income to the various allottees.
2. Applicability of section 9(1) of the Kerala Agricultural Income-tax Act to the case.
3. Applicability of section 9(4) of the Kerala Agricultural Income-tax Act to the case.

Issue-Wise Detailed Analysis:

1. Whether the family karar of 1909 constitutes a diversion of family income to the various allottees:

The primary question was whether the income from properties allotted to male members under the 1909 karar remained the income of the family. The court examined the nature of the karar, noting that it was an arrangement for maintenance rather than a division of property. The properties continued to be family properties, and the arrangement was revocable if circumstances changed. The court concluded that the karar did not constitute an irrevocable settlement, and the income from these properties remained family income.

2. Applicability of section 9(1) of the Kerala Agricultural Income-tax Act to the case:

Section 9(1) of the Act states that agricultural income arising from assets remaining the property of the settlor or disponer is deemed to be the agricultural income of the settlor or disponer. The court found that the properties under the karar continued to be family properties, and the arrangement was revocable. Therefore, the income from these properties was deemed to be the agricultural income of the family. The court compared this to section 16(1)(c) of the Indian Income-tax Act, 1922, and applied the same principles, determining that the income in dispute was used to discharge a family obligation and remained family income.

3. Applicability of section 9(4) of the Kerala Agricultural Income-tax Act to the case:

The court did not find it necessary to delve deeply into the applicability of section 9(4) due to its findings on the first two issues. The focus remained on whether the income in question was family income, which was resolved under section 9(1).

Conclusion:

The court concluded that the income from properties allotted under the 1909 karar remained family income and was subject to tax under the Kerala Agricultural Income-tax Act. The appeal was dismissed with costs, affirming the findings of the lower authorities and the High Court. The judgment emphasized the nature of the obligation and the revocability of the arrangement under the karar, maintaining that the income continued to be that of the family.