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TMI Blog1961 (4) TMI 124X X X X Extracts X X X X X X X X Extracts X X X X ..... said Hindu undivided family. This is evidenced by an affidavit sworn by the assessee on April 18, 1951. No entries in the books were made evidencing such a transaction. No transfers were effected at or about that time. On June 12, 1951, an oral partition was effected among the members of the aforesaid Hindu undivided family. Consistent with this partition, entries were made in the books of account. On June 26, 1951, a joint declaration was made by the assessee, his wife and his adult son in respect of such partition. A joint statement was also made to that effect on December 5, 1951, before the Talati and entries were made in the records of rights recording the transfers of the lands. The properties were transferred in accordance with the aforesaid arrangement to the names of the persons who became entitled thereto on such partition. The Income-tax Officer held that there did not exist any coparcenary property or any joint family prior to April 18, 1951, and that no coparcenary property or joint family came into existence subsequent to April 18, 1951. He included the entire income of these properties in the income of the assessee. An appeal was preferred from that decision to the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erned, within the meaning of section 16(3)(a)( iii) and (iv) of the Income-tax Act? Section 16(3) of the Income-tax Act to the extent that it is relevant provides as under: In computing the total income of any individual for the purpose of assessment, there shall be included- (a)so much of the income of a wife or minor child of such individual as arises directly or indirectly- ... (iii)from assets transferred directly or indirectly to the wife by the husband otherwise than for adequate consideration or in connection with an agreement to live apart; or (iv)from assets transferred directly or indirectly to the minor child, not being a married daughter, by such individual otherwise than for adequate consideration; and (b)so much of the income of any person or association of persons as arises from assets transferred otherwise than for adequate consideration to the person or association by such individual for the benefit of his wife or a minor child or both. Under section 2(9) of the Act the expression person , unless there is anything repugnant in the subject or context, would include a Hindu undivided family. Section 16(3)(a) is intended to rope in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there is no transfer within the meaning of section 16(3)(a)( iii) and 16(3)(a)( iv). In this connection, reliance has been placed on a decision of the Patna High Court, Sardar Bahadur Indra Singh v. Commissioner of Income-tax [1943] 11 ITR 16 (Pat.). Manohar Lall J., in the course of his judgment in that case, observes at pages 32 and 33 that it was well-settled that title to land cannot pass by an admission when the statute required a deed and that the property of an individual could not become the property of a joint Hindu family by mere expression of intention unless the property was transferred to the joint Hindu family by some means recognised by law. For instance, if it was movable property then it should be handed to the joint family and its subsequent possession or enjoyment should be shown to be on behalf of the joint Hindu family, or if it was immovable property then it must be transferred by a registered document if its value was more than ₹ 100. The learned judge seems to have in mind the provisions of law relating to transfer of property under the Transfer of Property Act, 1882, or provisions analogous thereto. Section 5 of the Transfer of Property Act lays down ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the hotch-pot and an affidavit expressing the clear intention of the assessee to convert his separate properties into joint family properties has been made on April 18, 1951, with the result that the hitherto separate properties of the assessee referred to in the affidavit, have been impressed with the character of joint family properties. It was urged by the learned Advocate-General that the effect of the action of the assessee in throwing his separate property into the hotch-pot and making an unequivocal declaration by his affidavit of his intent to convert some of his separate properties into joint family properties was to bring about a transfer of the said properties within the meaning of section 16(3). It was urged that the words from assets transferred appearing in section 16(3)(a)(iii ) and 16(3)(a)( iv) were words of wide import. Reliance was placed by the learned counsel upon a passage from Burrow's Words and Phrases, 1958, Supplement to volume V, at page 57. It is there stated as under: The word 'transfer' is not a term of art and has not a technical meaning. It is not necessary to a transfer of property from a husband to his wife that it should be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of assets directly or indirectly by the assessee to his wife and minor son. The assessee, while throwing the property into the hotch-pot, has effected a a change of ownership of the property. The same may be said to be transferred from the assessee, the individual, to the Hindu undivided family. Both the wife and the minor son are members of that Hindu undivided family. What we must consider is whether when a transfer is effected to such Hindu undivided family, there is a transfer to the wife and the minor son of the transferor who happen to be members of that family within the meaning of section 16(3). A Hindu undivided family is a person in the eye of the law within the meaning of the Income-tax Act, 1922. A Hindu undivided family is an assessable unit. Could it be said that when a transfer is effected to a Hindu undivided family which is an assessable unit, there is a transfer effected within the meaning of section 16(3)(a) to the wife and minor child of the asses-see who are also separately assessable units as individuals? Section 16(3)(a) aims at roping in income of the wife and minor child which may arise from assets transferred to such wife or minor child. The transfer cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndivided family, within the meaning of the words used in section 16(3)(a). When income accrues to a Hindu undivided family from the assets transferred to it, it cannot be said that such income becomes the income of the wife or minor child of the transferor who are members of such Hindu undivided family. When the legislature intended to deal with the income of any person which would include a Hindu undivided family or association of persons as arose from assets transferred to such person or association of persons, it has separately legislated about it by enacting the provisions contained in section 16(3)(b). When the subsequent transfers of properties took place among the members of the Hindu undivided family as a result of partition by metes and bounds, that transaction could not be regarded as a transfer by the assessee to his wife or minor child. The two transactions, viz., the one of throwing the separate property of the assessee into the hotch-pot of the joint family and the other of partitioning the joint family properties, are separate, genuine, independent transactions. Neither by the one nor by the other there has been any transfer, direct or indirect, effected by the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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