9911796707
TMI Blog1966 (2) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant year of assessment is 1954-55. For the assessment years 1929-30 to 1953-54, the assessee was assessed to income-tax as an individual on the returns filed on that basis by him. His sources of income were house property, share income from a firm, J. S. Mull Co., salary, dividends and the income from a business of mining and dealing in mica under the name and style " Chandmull Rajgarhia. " For the first time for the assessment year of 1954-55, he filed a revised return claiming his status to be Hindu undivided family in respect of income derived from the above sources ; but the assessment being made as before as an individual, he went in appeal before the Appellate Assistant Commissioner, who held that the income from all the above-mentioned sources excepting the last belonged to the Hindu undivided family consisting of Chandmull Rajgarhia and his sons. The income from the remaining source, namely, from the business run in the name of " Chandmull Rajgarhia " was assessable in the hands of the assessee as an individual. This finding was challenged by the assessee before the Appellate Tribunal ; and being unsuccessful there, he asked for a reference to this court of the two q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nother sum of Rs. 2,69,125 which he got from other sources during that period, which were assessed to income-tax. The total of the two came to Rs. 4,39,124. In paragraph 12 of that disclosure petition he stated that out of that amount of Rs. 4,39,124, he had made different investments of Rs. 2,53,000, including Rs. 70,000 in his mica business in 1945 (Chandmull Rajgarhia) and the balance of Rs. 1,86,124 left in his hand in cash. If that capital came out of the undisclosed income of Rs. 1,70,000, it was not from the joint family sources but only from the income from speculation and odd jobs done by the assessee himself. From the order of the Inspecting Assistant Commissioner accepting the disclosure, it appears that it had been agreed by the assessee that the addition of Rs. 70,000 in 1946-47 and Rs. 17,000 in 1947-48 as cash credit in his hand would not be disputed by him and his reference case in the High Court in that respect would be withdrawn by him ; the findings in the assessment years of 1946-47 and 1947-48 should not be disturbed. Paragraph 1 of the settlement form referred to in the Inspecting Assistant Commissioner's order and printed at page 80 of the paper-book shows th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was the separate business of a member, it became blended with the joint family when some money was taken from it and utilised in that business. It is, no doubt, open to a member of an undivided family to merge his separate earnings or his separate property into that of the joint family so that he abandons his own claims to that income or property before such a blending takes place ; but it is necessary that there must be a clear intention on the part of the person concerned to do so. Mere acts of generosity or inclination to help other members of the family with portions of such separate income will not be the merger of the two interests. The present case is not one in which it is urged that the father, Chandmull Rajgarhia, who started this new business, ever utilized after the 4th December, 1951, its income for the benefit of the joint family of other members of the family. Much less is in evidence about his intention to abandon his separate claim to this business. In his written statement filed in a partition suit in the Civil Court on the 24th of May, 1951, he asserted that this business was his own. That partition suit, however, came to an end with an award made by an arbitrato ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds in his own separate business. He may be accountable for such money that he takes or utilises ; but, how can it be said to be a blending, if neither the joint family nor he himself at that point or thereafter did not intend to treat that business to be for the joint family. We know that the doctrine of self acquisition as stated by Yajnavalkya is : " Whatever is acquired by the coparcener himself without detriment to the father's estate, as a present from a friend, or gift at nuptials, does not appertain to the coheirs. " This principle is much stronger in the case of a business started by a coparcener himself without detriment to the joint family. If, later on, the coparcener takes funds from the joint family for that business, that fact alone will not rob him of his claim to his business. For the transformation of exclusive rights into joint right there must be intention on the part of a coparcener to abandon his rights in favour of the joint family estate. Such intention can be inferred from circumstances. But, as already stated, there is no circumstance in this case till January or February, 1954, to show such intention of abandonment of exclusive rights. Learned counse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e some purchase and he received income and made disbursements in respect of the joint family properties at Hardoi ; but the purchases at Hardoi were made, to a large extent, not with joint family moneys, but with fees earned by Ram Narain in his practice as a pleader ; and it is with these properties that the appeals before the Judicial Committee were concerned. Their Lordships examined the question whether there was sufficient evidence to show that Ram Narain blended his own property with the joint property as to make the whole joint property. Their Lordships referred to an earlier case, Lal Bahadur v. Kanhaiya Lal , where a brother of a Hindu joint family paid into the same banking account his own earnings as an officer of the Indian Education Department as moneys admittedly belonging to the joint family ; and, in that context, it was held that, as there was a considerable nucleus of ancestral property in his hands, the onus was on him to prove that his subsequently acquired property was his separate estate. On the facts before their Lordships they found that there was a little or no direct evidence except the books of account that Ram Narain kept, supplemented by his own verbal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so shown on the receipt side in the same account book. Some properties were purchased by Ram Narain in Ratan Lal's name. From other evidence, particularly from a previous statement by Ram Narain, it appeared that he intended to make a gift of those properties to his son-in-law. The mere fact that the transactions were entered in the account books of the joint family and that part of the earnings was blended with the joint family property did not, in the opinion of their Lordships of the Judicial Committee, weaken the inference that he intended to gift away, to his son-in-law the properties purchased in his name. They observed : " Remembering that Ram Narain had full power to deal with his earnings as he thought fit, the fact that he blended those that were not otherwise used does not mean that every entry of a purchase in the book is an entry of a transaction so dealt with that it must be regarded as joint property. If, for example, having moneys of Ratan Lal's in his own hands, he either by using his own moneys or by borrowing on his own account obtained the funds necessary for the purchase of the property in question, and such properties were bought with the intention of benefi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tee found on evidence : " The business was, of course, under the control of the two elder brothers, and it appears that, from the date of the death of the third brother, no alteration whatever was made in the way in which the accounts were kept. The payments in respect of obtaining the probate of the will, which though not great in extent are several in number, were all made out of the business accounts. The payment of the moneys for the probate itself was made in the same manner ; but the legacy of Rs. 2,000 to the widow, and the like legacy to her as shebait of the idols, remained unpaid. The income received from the real estate was all through shown under separate heads and nowhere distinguished as between the business and the joint estate, and although it is said that the income from the latter was only Rs. 1,100 a year, yet none the less it was all treated in the same way. It is quite true, as has been pointed out, that, having regard to the nature of the items being carefully specified, both in respect of receipt and payment, it would have been possible to have prepared from the books a further account showing how the respective estates stood in relation to each other, an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for joint family expenses and purposes. About the income from the business, which was not a joint family estate, more particularly after the death of Radha Gobinda in November, 1902, it was found that it was used also for purposes other than the business itself and was mixed up with the income from the joint family estate. The facts of the instant case before us do not have any similarity with the features of the reported decision in which blending of separate and joint family estates was inferred. The mere confusion of the two kinds of income in one account does not lead to the inference of blending, but other factors pointing to an intention of blending, when discovered, contributes to such inference. In my view, therefore, neither of the two cases support the contention of the learned counsel. The inclusion of Rs. 1,86,124, part of which was from the savings from the joint family income in the business " Chandmull Rajgarhia ", was not enough to conclude that that business became thereafter a part of the joint family estate. Learned counsel next referred to a decree passed in a partition suit on the basis of an award made by an arbitrator. The suit was filed in February, 1951, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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