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TMI Blog1985 (4) TMI 126X X X X Extracts X X X X X X X X Extracts X X X X ..... CED (1983) 36 CTR (Raj) 320 : (1984) 147 ITR 29 (Raj), CWT vs. Thakur Bhairon Singh (1984) 147 ITR 32 (Raj), Thankur Gopal Singh vs. CWT (1975) 99 ITR 354 (Raj), Maharajadhiraj Himmat Singhji vs. CWT (1984) 38 CTR (Raj) 342 : (1984) 150 ITR 416 (Raj) for the proposition that the Jagir and Sanad having been abolished and property taken over by the Government, the compensations so received is HUF property and that anything acquired by the forefathers out of the Sanad s income i.e., agricultural income would be ancestral property assessable as HUF property. Regarding intention to convert individual property into an HUF property, he relied on CIT vs. Himmatmal Jaswantraj (1980) 19 CTR (Mad) 256 : (1980) 126 ITR 391 (Mad), CIT vs. Harish Chandra Gupta (1981) 132 ITR 799 (Ori), CIT vs. Babulal Joshi Ors. (1981) 22 CTR (Ori) 150 : (1982) 133 ITR 30 (Ori), ITO vs. Bhawani Singh (1984) 8 ITD 414 (Del), ITO vs. H. H. Shri Bhagwat Singhji (1982) 14 TTJ (Bom) 124. 3. Regarding partition of the compensation in respect of acquisition of Masuda House Mr. Ranka referred to para 17 of the Tribunal order for asst. yr. 1968-69 and para 23 the same order. He referred to the claim of partition at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of Intermediary and Land Reform Act, 1955, the Jagirdari system was abolished and the State came to own the properties. The assessee was granted compensation in lien of such acquisition by the Government. The compensation so received was deposited in the shape of FDRs with the banks and the interest was earned on it. The amount of compensation so received was partitioned amount the family members. Since the amount of compensation having been partitioned whatever was received by the assessee as his share only that would be assessable in his hand. The Department, however, was of the view that since the original character was impartible, the same character continued vis-a-vis the compensation. He, therefore, assessed the entire interest in the hands of the individuals. The AAC followed his earlier order and held that the whole of the house property income, business income and the interest has been rightly assessed in the hands of the individual. Aggrieved by this finding, the assessee in the status of individual as also in the status of HUF have come up before this Tribunal. 6.2. It is noted that these very properties came up for consideration before the Tribunal for the asst. yrs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt was whether on abolishing of Jagirdari, the compensation so received by the assessee was assessable in the status of individual treating as an impartible property or assessable as HUF. Their Lordships have considered the Rajasthan Land Reform Resumptions of Jagirs Act, 1952. They have also had occasion to consider Jaipur Matmat Rules, 1945. They had considered the definition the State Grant. The State grant as defined is reproduced Below: "State Grant means a grant of an interest in Land made or recognised by the ruler of the Jaipur State and includes a Jagir, muamala, Suba, istimrar, chakot badh, bhom, inam taukha, udak, milak, aldofa, khangi, bhog or religious grant a site granted free of premium for a residence or a garden or other grant of a similar nature." They have further observed that the rules indicate that the first grant would be governed by the rule of primogeniture this and in consequently in partible. They have further observed that a State Grant has been defined to mean a grant and an interest in land made or recognised by the ruler of Jaipur State. They made an important observation which is thus according to the several provisions of Jaipur Mamti Rulers, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n was annexed to the decision of Bhawani Singh vs. CED. 12. It is evidenced from the fact as far back as 26th Sept., 1979 in the case of Thakur Laxman Singh the Rajasthan High Court had made an observation that their order into the case of Thakur Bharon Singh s case which was sought to be taken to the Supreme Court by an application for grant of leave, was refused, and, therefore, the decision of this Court in Thakur Bharon Singh s case becomes final. This particular decision of Thakur Laxman Singh is annexed to the decision of Maharajadhiraja Himmat Singh vs. CWT. In the case of Himmat Singh their Lordships of the Rajasthan High Court considered the case of a former ruler. Their Lordships observed that the former ruler was governed by Hindu Law and the rule of primogeniture applied to him. The Jagir and the residential hose were impartible. The Jagir was resumed and compensation was paid to the assessee. The assessee had certain properties which were also sold. The question for consideration was whether the property so received was assessable in the hands of the assessee treating him as an individual or HUF. Their Lordships have observed very clearly that there is no manner of d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... old that the property held by Rao Narain Singh bears the character of impartibility. The next question that arises is if the answer to the 2nd question is in the negative won t it be justified to hold that the property is assessable as an HUF property as the assessee has made clear the intention about the conversion as a family property. 15. In view of above observation of the Rajasthan High Court which bear the stamp of Supreme Court also as has been specifically observed in the case of Thakur Laxman Singh that the decision has become final as the special leave petition to the Supreme Court was refused, we feel that the reconsideration of the decision made for the asst. yrs. 1960-61 to 1969-70 would be necessary. We also feel that in view of we having analysed similarity between in Thakur Ummed Singh s case the matter could be decided at our end. We have come to this conclusion by placing reliance on the observation of the Hon ble Rajasthan High Court in the case of Bhawani Singh Thakur has been annexed as an appendix. They had applied Thakur Ummed Singh s case also Thakur Bhairon Singh s case. The above said decision were not considered in appeal for the asst. yrs. 1960-61 to 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they have observed that consequent to the enactment the property retains the full character of ancestral and thus becomes HUF property. When the very acts had reduced impartibility to a nullity the property cannot be said to be still having the character of impartiblity. In such a situation the assessee cannot be deemed to be in possession of property as impartible estate. 18. The property was ancestral with which the Department is not in dispute. This ancestral property by the act of the Karta has been thrown into the family hotch pot as an abandon precaution. Such an action has been held to be valid by various High Courts as well as the Supreme Court. The assessee had filed the returns as Karta of the family wherein he had included the income from the property, business and interest. These returns have been verified by the assessee also and, therefore, the property is rightfully assessable in the hands of HUF. In Thakur Ummed Singh s case their Lordships further observed that if an assessee had been filing returns in the status of an individual in the earlier years and subsequently by an action of his intention expressed that it shall be treated as an HUF property has to be acc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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