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TMI Blog1986 (9) TMI 154X X X X Extracts X X X X X X X X Extracts X X X X ..... hile filing its wealth-tax return for the assessment year 1978-79 claimed for the first time, that, on the death of Nathmal Choudhary, one-third share of Nathmal Choudhary in the joint family properties devolved on his legal heirs by succession and hence what had been left with the HUF was only the remaining two-third of the properties and thus the HUF was assessable only in respect of two-third of the properties. The wealth-tax returns for the subsequent assessment years, viz., assessment years 1979-80 to 1981-82 were also filed on this basis. In the income-tax returns for the assessment years 1980-81 and 1981-82 too, only two-third of the income of the properties was shown on the ground that the remaining one-third of the income had ceased to belong to the HUF on the death of Nathmal Choudhary when his share in the joint family properties devolved on his legal heirs by succession. 3. The main issue to be decided in these appeals is whether the assessee-HUF is assessable only in respect of two-third of the properties. The WTO (or the ITO) was of the view that the assessee-HUF was to be held to be the owner of the entire property and as such, it was liable to be taxed in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... class who claims, through such female relative, the interest of the deceased in the Mitakshara coparcenary property shall devolve by testamentary or intestate succession, as the case may be, under this Act and not by survivorship. Explanation 1 : For the purposes of this section, the interest of a Hindu Mitakashara coparcener shall be deemed to be the share in the property that would have been allotted to him if a partition of the property had taken place immediately before his death, irrespective of whether he was entitled to claim partition or not." Devolution by survivorship was preserved except in cases covered by the proviso. In this case, however, the proviso becomes applicable in view of the fact that Nathmal Choudhary had died leaving him surviving his wife, a female relative specified in class I of the Schedule of the Hindu Succession Act. Hence, the share of the deceased coparcener, which would have been allotted to him on partition, if a partition had taken place immediately before his death, is to devolve on his legal heirs, i.e., his wife and his son, by succession. The HUF is to continue but the share of the deceased coparcener in the properties of the HUF having ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Konda Reddy. Venkata Konda Reddy had executed a will in July 1910 devising in favour of the four sons of his nephew Bala Konda, who were born before the date of the will. Butchi Tirupati was one of those four sons of Bala Konda Reddy who were born before the date of the will. Venkata Reddy died in 1915 and the property devolved by virtue of the disposition under his will on the four sons of Bala Konda. It was contended by the defendants to the suit filed by Pulla Reddy and Lakshmama that the property devised under the will of Venkata Konda Reddy became, by subsequent blending property of the joint family and the plaintiffs were not entitled to claim a share larger than the share that they had in the joint family property. Two sons were born to Bala Konda Reddy after the date of Venkata Konda's will, and they were not devisees under the will. Hence, if the property was to be regarded as having been blended with the joint family property, then the share on partition would have been one-sixth, whereas the claim of the plaintiff was for one-fourth share. The Supreme Court held as under : "Law relating to blending of separate property with joint family property is well settled. Prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of that property. 8. In this case another significant fact to be kept in view is that one of the legal heirs of Nathmal Choudhary was a female. The legal heirs of Nathmal Choudhary were his wife and their son Ram Autar Choudhary. Now it is established law that a Hindu female cannot be coparcener and the doctrine of blending cannot apply to her. This was affirmed by the Supreme Court in the case of Pushpa Devi v. CIT [1977] ASC 2230. The Supreme Court held as under : "19. Having considered the decisions cited at the bar it may be useful to have a fresh look at the doctrine of blending. The theory of blending under the Hindu law involves the process of a wider sharing of one's own property by permitting the members of one's joint family the privilege of common ownership and common enjoyment of such properties. But while introducing new shares in one's exclusive property, one does not by the process of blending efface oneself by renouncing one's own interest in favour of others. To blend is to share in favour of others not to the exclusion of oneself. If a Hindu female, who is a member of an undivided family impresses her absolute, exclusive property with the character ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the AAC was not justified in deleting a sum of Rs. 64,000 on the ground that there had been a double addition of that amount in the computation of the total wealth of the assessee. On this matter we restore the appeals to the AAC. We will direct him to decide the matter afresh after providing the assessee and the department an opportunity of being heard. 11. In the cross-objection filed by the assessee in respect of the wealth-tax appeals for the assessment year 1978-79 it is contended that while determining the value of the house property at 16 times the rental income, a deduction was required to be given for the municipal taxes, etc., for the purposes of arriving at the net rental income. It is stated that the value determined without providing for such deductions is highly excessive. We find that this matter has not been considered by the AAC. Hence we do not entertain this ground as it does not arise out of the order of the AAC. 12. In the end, the income-tax appeals filed by the department for the assessment years 1980-81 and 1981-82 are dismissed. The wealth-tax appeals filed by the department for the assessment years 1978-79 to 1981-82 are only partly allowed, for stat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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