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TMI Blog2001 (1) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... standing in the name of the Hindu undivided family in the books of Karshandas Bechardas and Sons was partitioned amongst the members of the family. At the time of the partition, the assessee was a minor and, therefore, his share of income from the said firm was included in the hands of his father as per the provisions of section 64 of the Income-tax Act, 1961 ("the Act" for short). After he attained majority, his share of income from the said firm was assessed in the capacity of "individual". In the previous year, relevant to the assessment year 1979-80, the assessee got married. In his return of income filed in the status of "individual", the assessee did not show his share of profits from the said firm, as he took up a stand that since he had received his share on the partition of the family and since after his marriage, his smaller Hindu undivided family came into being, the share of profit in the said firm belonged to his smaller Hindu undivided family and not to him in his individual capacity. The Income-tax Officer, however, took the view that since the assessee was a minor at the time of partition, the partition was not valid in law. For this purpose, the Income-tax Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to be treated as belonging to the assessee in his individual capacity. According to learned counsel, the assessee was the absolute owner of the property which fell to his share as a result of partition and was competent to deal with it as he wished and till a son is born in the smaller Hindu undivided family, the share income from the said firm being his individual income, the assessment of the assessee in the capacity of individual being just and legal, should have been upheld by the Tribunal. What was emphasised was that when the property was received by the assessee at partition, he was a single member and did not constitute a family and his status as individual did not get altered on his marriage and in the absence of a son, as the personal law of the assessee regards him as the owner of the property, the assessment in the capacity of individual ought to have been upheld by the Tribunal. In support of his submissions, learned counsel placed reliance on the Full Bench decision of the Patna High Court in CIT v. Shankar Lal Budhia [1987] 165 ITR 380. Though served, none appears on behalf of the respondent. Opinion: We have considered the submissions made at the Bar by learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The daughter too, on her birth, became a sapinda and until she leaves the family by marriage, the tie of sapindaship will bind her to the family of her birth. As said by Golapchandra Sarkar Sastri in his Hindu law, 'those that are called by nature to live together, continue to do so' and form a joint Hindu family. The appellant is not by contract seeking to introduce in his family strangers not bound to the family by the tie of sapindaship. The wife and unmarried daughter are members of his family. He is not by agreement making them so. And as a Hindu male, he himself can be the stock of a fresh descent so as to be able to constitute an undivided family with his wife and daughter." Having regard to the principles laid down by the Supreme Court in the above quoted decision, we are of the opinion that the distinction pointed out by the Supreme Court is very material for deciding as to whether the absence of a second sharer within the Hindu undivided family renders what is otherwise joint family property, individual property. In cases where the property held by the person who claims it to be his own, had in fact been held by a joint family earlier and if ipso facto capable of bein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h had held that in the absence of a son who could claim a partition, the property though ancestral was only to be assessed as individual property of the assessee therein. The Division Bench of this court had an occasion to consider this question in Bharatkumar Chinubhai v. CIT [1969] 71 ITR 1. In the said case, a family consisting of father, mother, son and daughters was reduced to one male coparcener with an unmarried sister on the father's and the mother's death. The Department contended that as the assessee was the sole coparcener, the property which originally belonged to the family should be assessed to wealth-tax, as the property of the assessee as an individual and not as the property of a Hindu undivided family consisting of the assessee and his sister. The High Court on a review of the case law has held that the property belonged to the Hindu undivided family and was assessable as such in the hands of the Hindu undivided family. What is ruled therein is that the property received on partition of a joint family by a coparcener having a wife and daughter belongs to the Hindu undivided family and it is assessable as such in the hands of the Hindu undivided family under the I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be assessed in the status of an individual. However, on further appeal to the Tribunal, the order of the Income-tax Officer was restored. In reference at the instance of the assessee, the Madras High Court, after referring to the judgments of the Supreme Court on the point, has held that when the assessee got married and acquired a family, that family constituted a Hindu undivided family and the ancestral property which the assessee had received at the partition, became the property of that Hindu undivided family. Further it is held that in cases were the property even at the time it vested in the hands of the head of the family, had the character of ancestral property, the absence of a son, who can claim partition, does not render what is joint family property, individual property. The test, according to the Madras High Court, is not as to whether his issues are male or female, but the test is whether the property was ancestral. Thus, after considering the principles of Hindu law, the Madras High Court has held that an individual who receives ancestral property at partition and who subsequently acquires a family, but has no male issues, would hold that property only as property o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ituted a Hindu undivided family. Reliance placed by learned counsel for the Revenue on the Full Bench decision of the Patna High Court in the case of CIT v. Shankar Lai Budhia [1987] 165 ITR 380, is of no avail to the Revenue. With great respect to the learned judges who decided the case, we are unable to agree with the line of reasoning suggested therein. The Full Bench of the Patna High Court had no occasion to consider the two Division Bench judgments of this court which are referred to earlier. Moreover, the Supreme Court decision in N.V. Narendranath's case [1969] 74 ITR 190, was also not considered by the Full Bench of the Patna High Court. An individual who receives ancestral property at a partition and who subsequently acquires family, but has no male issue, would hold that property only as the property of a Hindu undivided family. Under Hindu law, the wife of a coparcener is certainly a member of the family. As pointed out in the case of Surjit Lai Chhabda v. CIT [1975] 101 ITR 776 (SC), whatever be the school of Hindu law by which a person is governed, the basic concept of a Hindu undivided family in the sense of who can be its members is just the same. Thus, it is now ..... X X X X Extracts X X X X X X X X Extracts X X X X
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