2001 (2) TMI 7 - SC - Income Tax

Assessee and her two daughters inherited in their individual capacity a 1/3rd share each in the estate of the deceased- it can t be concluded that the assessee and her daughters were capable of forming a joint Hindu family or of throwing the interest of any one of them in the inherited property therein - concept of Hindu females forming a joint Hindu family by agreement amongst themselves appears to us to be contrary to a basic tenet of the Hindu personal law - revenue appeal allowed

Summary

Issues:
1. Capacity of Hindu females to form a joint Hindu family.
2. Impression of inherited property with the character of joint family property.
3. Assessability of inherited property in the hands of the assessee as an individual.

Issue 1: Capacity of Hindu females to form a joint Hindu family
The case involved the question of whether Hindu females, specifically in the Dayabhaga school of Hindu law, could form a joint Hindu family among themselves. The High Court answered this question affirmatively, allowing the female heirs to create a joint Hindu family by agreement. However, the Supreme Court disagreed with this interpretation. The Supreme Court highlighted that the concept of Hindu females forming a joint Hindu family by agreement contradicts a fundamental principle of Hindu personal law, which traditionally requires the presence of a male member for the constitution of a joint Hindu family. The Court emphasized that no authorities were presented to support the idea of Hindu females forming a joint Hindu family without male members.

Issue 2: Impression of inherited property with the character of joint family property
The case involved the contention that the female heirs of a deceased Hindu, governed by the Dayabhaga school of Hindu law, could impress their inherited property with the character of joint family property. The High Court ruled in favor of the assessee, allowing the female heirs to blend their individual shares into a joint Hindu family. However, the Supreme Court disagreed with this interpretation. The Court clarified that under the Dayabhaga school, each heir takes a definite share in the inherited property, and blending individual shares to create joint family property is not permissible. The Supreme Court emphasized that even if a female member owns property separately, she cannot merge it with joint family property, whether an existing joint family or one created through an agreement.

Issue 3: Assessability of inherited property in the hands of the assessee as an individual
The case also addressed the assessability of the inherited property in the hands of the assessee as an individual for income tax purposes. The High Court ruled against the Revenue, stating that one-third of the properties inherited from the husband was not assessable in the hands of the assessee as an individual. However, the Supreme Court disagreed with this conclusion and ruled in favor of the Revenue. The Court emphasized that the assessee and her daughters inherited the property in their individual capacities, and there was no legal basis for considering them capable of forming a joint Hindu family or pooling their shares into joint family property. Therefore, the inherited property was held to be assessable in the hands of the assessee as an individual.

In conclusion, the Supreme Court overturned the High Court's decision on all three questions, emphasizing the traditional principles of Hindu personal law and the inability of Hindu females under the Dayabhaga school to form a joint Hindu family among themselves or blend their inherited property into joint family property.