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TMI Blog1942 (9) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... ndu joint families under the Mitakshara system that expression of a wish on the part of the sons severed the joint family, and, as there were only four coparceners, the necessary result was that the shares in the joint family property became divided equally between the four coparceners, who then held as tenants-in-common. But there has been no physical division of the joint family property. I use the expression physical division in preference to the more usual expression division by metes and bounds , because the latter expression is only applicable strictly to immovable property. Both the Assistant Commissioner and the Appellate Tribunal considered that a mere severance of the joint family was not enough for the purpose of Section 25A: that there must be an allotment of shares, though both Tribunals thought that a physical division was not necessary. I must confess that I do not follow that opinion. It appears to me perfectly plain, on the finding that the joint family severed in July, 1939, that the shares were definitely ascertained, and there being four members of the family each became entitled to a one-fourth share of the family property. To my mind, the real question to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... families under the Dayabhaga system, as to those under the Mitakshara system. Under the Mita-kshara system there are always two steps in a complete partition. There is, first, the division in interest, which may be brought about by agreement, by filing a suit, or by expressing an intention to divide, and there is the physical division of the property, which may, and often does, take place, years after the division in interest. But under the Dayabhaga system the members of the joint family are divided in interest; they are in a position analogous to that of tenants-in-common, that is to say, they are originally in much the same position as the members of a Mitakshara family after the family has disrupted, and there has been a division in interest. I do not see what effect Section 25A can have on the property of a Dayabhaga joint family, if the opinion of the Income-tax Officer must be directed merely to a division in interest which always existed. It seems to me that Section 25A will have no effect at all on families under the Dayabhaga system, unless it is held to involve a physical division into definite portions. Sub-section (2) of the section also seems to me to favour that c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igh Court, to which I will refer more in detail later, the bench suggested, in construing Section 25A, that the words portion and share were synonymous. But that, I think, is not so. No doubt, the words sometimes may be used interchangeable, but in connection with property I should say that a portion means a part of the property, whereas a share indicates the interest of some individual in the property. A room may be said to be a portion of a house; it cannot be said to be a share of a house, although it may represent the share of a particular person in the house Portion seems to me the apt word for division of property, and share for division of interest, and it is significant that portion is used in Section 25A. No doubt the expression division in definite portions'' will have to be construed with regard to the nature of the property concerned. A business cannot be divided into parts in the same manner as a piece of land; division may only be possible in the books. Special cases will have to be dealt with by the Income-tax Officer when they arise. If he comes to the conclusion that, having regard to the nature of the property, what has been done amounts to a di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Court. But their determination is part of the machinery for effecting the final partition, and does not form an independent stage in partition. In my opinion, the judgment of the earlier bench of the Lahore High Court is to be preferred to that of the later bench. Then there is a decision of a bench of the Allahabad High Court in Biradhmal Lodha v. Commissioner of Income-tax [1934] 2 ITR 164; ILR. 56 All. 504 in which it was determined only that Section 25A did not apply to a partial division of joint family property, a view recently accepted by the Privy Council. That question is not before us, but Mr. Justice Niamatullah, in the course of his judgment, said that a division by metes and bounds was not required for the purposes of Section 25A. The question did not really arise in that case and moreover the property in question was a business, to which as have already suggested, special considerations may apply. In my opinion, that case is no authority on the question we have to determine on the construction of Section 25A. Then there is a decision of the Judicial Commissioner's Court at Nagpur, Sir Bisesarclas Daga, In re [1936] 4 ITR 66; 9 ITC 206 , in which the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the undivided family, while holding all the members jointly and severally liable for the total tax. If, however, though the joint Hindu family has come to an end, it be found that its property has not been partitioned in definite portions, then the family is to be deemed to continue-that is to be an existent Hindu family upon which assessment can be made on its gains of the previous year . The Board do not say in express words what they mean by the words quoted partitioned in definite portions, as no question-as to their interpretation arose but it seems to me that the Board contemplated a physical division of the property, because the passage quoted shows that they had distinctly in mind the Dayabhaga system, under which no division in interest is necessary. In my opinion, on the words of Section 25A of the Indian Income-tax Act we ought to answer the question put to us in the affirmative, because there has been no physical division of the joint family property. The authorities in India are conflicting, and as I read the decision of the Privy Council, although it is not directly in point, it favours the view that a physical division of the property is required. Kania, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and drafts were prepared but that nothing more had been done up to the relevant time. The argument on behalf of the applicant is that under Section 25A, once the joint family status had come to an end, the shares were ascertained, and the latter part of the section must mean that the joint family property had been partitioned in definite portions. In the first instance, it may be noted that the word portion, when read in conjunction with partition of joint family property, would ordinarily mean a physical division, and not a definition or ascertainment of shares only. It was argued that under the Hindu law on an unequivocal expression of intention to sever, the joint family status came to an end, and the Income-tax law could not be framed to alter that substantive law. I think this argument is fallacious, because by the Income-tax Act no attempt is made to alter the substantive law. The Income-tax Act only lays down the manner in which the income of what was once a joint family estate should when it is alleged that the joint family had come to a partition, be assessed. The scheme is that if it is proved to the satisfaction of the Income-tax Officer that there was not only a r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 457. That passage clearly shows the interpretation put by their Lordships on Section 25A of the Income-tax Act as affecting the assessment of joint families governed by the Mitakshara law. Their Lordships in the first portion say that by a mere claim of partition a division of interest may be effected among coparceners so as to disrupt the family and put an end to all rights of succession by survivorship . Then they further state that on such a declaration the effect is that the family property will belong to the members as it does in a Dayabhaga family -in effect as tenants-in-common. The result, therefore, is that their Lordships emphasize the view that on the declaration made by a member to sever his tie with the family, the result is what would be the normal state of affairs in a joint family governed by the Dayabhaga law. The passage quoted in the judgment then goes on to state that Section 25A provides that if it be found that the family property has been partitioned in definite portions, assessment may be made on each individual in respect of his share of the profits. But the concluding words emphasize clearly that if such division is not made, the joint family will con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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