9911796707
TMI Blog2001 (1) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1961, in respect of the assessment year 1979-80: "Whether, on the facts and circumstances of the case, the share income from Karshandas Bechardas and Sons was rightly deleted from the total income of the assessee who was assessed in the status of an individual?" Facts: The respondent-assessee is an individual. He was a member of a Hindu undivided family known as "Kantilal Karshandas" which was a partner in the firm of Karshandas Bechardas and Sons through its karta. A partial partition had taken place in the family in the year relevant to the assessment year 1970-71 by which the amount 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. The Commissioner of Income-tax, Gujarat-IV, Ahmedabad, claimed reference from the Tribunal on the point of law which is accepted and that is how the present reference is placed before us for our opinion. Mr. Akil Kureshi, learned counsel for the Revenue, submitted that where on a partial partition of a Hindu undivided family, the assessee is allocated his share, the status of individual governed by Hindu law would not automatically change to that of a Hindu undivided family merely on his marriage and till a son is born, into a smaller Hindu undivided family, the share income from the firm will have 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Supreme Court in the case of Surjit Lal Chhabda v. CIT [1975] 101 ITR 776, after reviewing the earlier decisions on the point, has held as under: "The joint Hindu family, with all its incidents, is thus a creature of law and cannot be created by act of parties, except to the extent to which a stranger may be affiliated to the family by adoption. But, the absence of an antecedent history of jointness between the appellant and his ancestors is no impediment to the appellant, his wife and unmarried daughter, forming a joint Hindu family. The appellant's wife became his sapinda on her marriage with him. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been held earlier by a coparcenary in which a member of that family was one of the coparceners. In the case of N.V. Narendranath v. CWT [1969] 74 ITR 190, the apex court has held that the ancestral property allotted to the member whose family consisted of himself, his wife and his daughter was property belonging to Hindu undivided family and required to be assessed as such, notwithstanding the absence of a son who alone could claim partition. In that case, the two factors referred to earlier coalesced--there existed a family and the property was ancestral. The Supreme Court disagreed with the High Court which 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en 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. The assessee filed a wealth-tax return disclosing the wealth of the assessee in the capacity of a specific Hindu undivided family. The assessee filed a revised return subsequently and claimed that he should be assessed as an individual. The assessee was assessed as a specified Hindu undivided family. In appeal, the Deputy Commissioner (Appeals) accepted the assessee's claim that he should 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a reference, the Madhya Pradesh High Court placing reliance on a Full Bench decision of the Madhya Pradesh High Court in CIT v. Krishna Kumar [1983] 143 ITR 462, has held that the Tribunal was not justified in not accepting the status of the assessee as Hindu undivided family for assessment years 1980-81 to 1983-84. The Madhya Pradesh High Court has taken the view that the assessee was entitled to be assessed in the status of a Hindu undivided family, although the assessee had no son and the wife had no interest in the property of the family, because for the purposes of status, the assessee with his wife had constituted 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] ..... X X X X Extracts X X X X X X X X Extracts X X X X
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