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TMI Blog1980 (2) TMI 145X X X X Extracts X X X X X X X X Extracts X X X X ..... . While making the partition the capital invested in the firm was divided in such a manner that the entire capital in Prince Co., Madras was allotted to the capital invested in the other films. Thereafter, Thallam Chinna Subramaniam filed return for the Asst. yrs. 1966-67 to 1972-73 in the status of an individual in respect of the income arising to him as a member of the firms and assessments were completed accordingly. For the asst. yr. 1973-74, he filed two returns, one in the status of a HUF consisting of himself and his sons in respect of share of income from Prince Co., Madras only and the annuity deposit refund and another for the rest of the income also in the status of a smaller HUF consisting of himself and his wife. But the ITO assessed all the incomes in the status of an individual and there appears to have been no appeal against that assessment. For the present asst. yr. 1974-75 also the assessee filed two similar returns in the status of a HUF and the ITO again assessed all the incomes in the status of an individual. The assessee appealed without success. Hence the further appeal before us. 3. It was contended on behalf of the assessee that in the partition effec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there was no detriment to any family funds. That is the reason why the income earned from the firm was required to be assessed as his own individual income and could not be treated as that of the HUF. 4. The case of the assessee that there was an omission to deal with an asset of the family in the partition has only to be stated to be rejected. As we have seen there was no independent asset as a share in the firm which could belong to the family because the share in the firm always belonged only to the individual. Factually also the family never treated a membership of the firm as an independent asset belonging to the family but only the funds contributed as a capital asset belonging to the family not only in the firm of Prince Co., Madras but also in other two firms. The assessee has not made any similar claim in respect of the other two firms in which also the right to future profits was not treated as an asset of the family. Therefore, the claim made by the assessee, that an asset of the family was omitted to be partitioned, is an obvious after-thought put forward to support the claim to exclude a portion of the individual's income from his total income for the purpose of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Supreme Court is that given in the case of Surjit Lal Chhabada (8). In that case, the assessee had a wife and an unmarried daughter. He made a declaration that he had thrown his self acquired property into the family hotchpot and that he would be holding it as Kartha of the HUF consisting of himself, his wife and his daughter. It was held that the Joint Hindu Family was a creature of law and was normally joint in food, worship and estate and that the property of the joint family may consist of ancestral property, joint acquisition and of self acquisitions thrown into the common stock. It was further pointed out that the expression 'HUF' has to be understood under the personal law of the Hindus and that it need not consist of at least two male members. But it was held that the property could not be assessed as joint family property as the single coparcener had absolute power of disposal until a son was born. It was pointed out that there were two classes of cases one where property which belonged to a subsisting undivided family and the family is reduced to a sole surviving coparcener and the other where property is impressed with the character of joint family property by a sole ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he hands of a sole surviving coparcener could be subject to estate duty on his death as property which he was competent to dispose of whether inter vivos or by will. It is more important to consider whether these observations hold good even after the modification of the Hindu Law for when the Indian IT Act, 1922 was repealed and the IT Act, 1961 was enacted Parliament must be presumed to have kept in mind the changes in Hindu Law which has occurred in the mean while. And since the meaning of the expression "HUF" must be based on the personal law of the Hindus, we must see what it was in the personal law in 1961, According to the observations of the Privy Council cited above, the rights of a sole surviving coparcener with respect of his ancestral property was limited by (a) the adoption of a son and (b) the rights of female members. Under the Hindu Law as it then prevailed a widow could adopt a son only to her husband and not to herself so that the adoption dated back to the death of a sole surviving coparcener and provided continuity for the joint family character of the property. But the Hindu Adoptions and Maintenance Act, 78 of 1956 which has overriding effect (Sec. 4) empowers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of Karuppana vs. Machammal (13) that after this enactment a daughter cannot claim a provision for marriage out of joint family properties when the properties are partitioned since she has been provided a share out of her father's share of the properties on his death and is to be maintained by him during his life time. On the same analogy a wife cannot claim a share of the joint family property and has no right to partition it from her husband even if he happens to be a sole coparcener. We can see that women have been "liberated from the bonds of joint family property" and have no longer any rights there in. 14. On analysing the effect of the codification of Hindu Law it appears that the reasons given by the Privy Council to consider the property received by a sole surviving coparcener as still joint family property no longer holds good. The situation even in that class of cases, has now become the same as that in the second class of cases, described by the Privy Council in the case of Kalyanji Vithaldas (14). "In an extra legal sense and even for some purposes of legal theory ancestral property may perhaps be described and usefully described as family property but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ention to discriminate between one property and another held by a sole coparcener by reason only of its origin, which has no nexus with the incidence of taxation. In fact, Parliament has insisted on the existence of more than one coparcener as a condition for concessional rates of tax under the Finance Acts. A HUF may be different from a coparcenary and refer to a family living together and being joint in food and worship and thus include women. But when it comes to property the word 'undivided' can have no meaning unless the persons governed by that expression have a joint interest may be least interested therein. We find that after codification of the Hindu Law, none other than coparceners can have any interest in joint family property and in the case of a sole coparcener his ownership is absolute. In the context of the IT Act 1961, if at all we are to give some meaning to the word 'undivided' in the expression ' Hindu undivided Family' we must identify it with a coparcenary. Nothing can be more coparcenary. Nothing can be more clear or simpler than to say that the expression HUF in the IT Act 1961 refers only a coparcenary in relation to joint family property. 17. It follows t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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