9911796707
TMI Blog1998 (4) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... a property bearing Nos. 638 to 642, Rangai Gowder Street, Coimbatore. The assessee's father was not employed anywhere, but started a hotel prior to the family partition. In the course of time, the assessee's father, Govinda Iyre, purchased certain properties, like Devangapet building for Rs. 5,750 on November 25, 1934, a property in Raja Street, Coimbatore, for Rs. 4,500 and another property which is the subject-matter of the tax cases, situate in No. 7/7 Cross-cut Road, Coimbatore, for Rs. 10,500 on May 22, 1936. Besides the above properties, he also obtained certain other properties with which we are not concerned under a will executed by his father. The father of the assessee out of natural love and affection settled the property situate at No. 7/7, now called State Bank Road, Coimbatore, in favour of the assessee by a registered deed of settlement dated March 31, 1960, stating that the said property was his self-acquired property and he was in absolute possession and enjoyment of the said property from the date of purchase, that is, May 22, 1936. Under the terms of the settlement, the assessee was required to look after the needs of his father and was obliged to fulfil certain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t committing any default every month and shall obtain the receipt. (3) I shall be paid Rs. 150 per month towards my expenses until my lifetime and shall obtain a receipt. (4) The undermentioned property shall be the charge for the proper maintenance of items Nos. 1 to 3. (5) The undermentioned property subject to the aforesaid charge shall be enjoyed by my son, C.G. Venkatasubban, by paying the tax, etc., from this day onwards until his lifetime without subjecting the property to any kind to exchange and shall pay the respective amounts as mentioned in items Nos. 1 to 3 from the income of the aforesaid property and the remaining amount of income shall be utilised for executing the repair relating to the building and shall enjoy the balance amount. After the lifetime of the aforesaid person, his legal heirs shall enjoy the undermentioned property subject to the aforesaid charge and shall enjoy absolutely with the power to gift, exchange, sale, etc., from son to grandson heriditarily and shall live comfortably. Anyone purchasing the property from the legal heirs of my son and obtaining the right shall be bound by the aforesaid charges." On March 17, 1971, a family partition w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acity. The Revenue carried the matter in appeal before the Income-tax Appellate Tribunal. The Appellate Tribunal concurred with the views of the Appellate Assistant Commissioner and came to the conclusion that the property was settled in favour of the assessee not for his exclusive benefit, but the settlement was for the benefit of the assessee as well as the members of the family and, therefore, the property must be deemed to be the property belonging to the joint family of which the assessee is the karta, The Tribunal also relied upon the deed of partition and held that in the partition of the entire joint family properties, what was given to the asses see was not a share which would have normally been allotted to him in a partition and the unequal partition shows the property in question was not intended for the exclusive benefit of the assessee. The terms of the settlement deed imposing restrictions against the enjoyment of the property as his own, according to the Tribunal, would show that the property was not the assessee's personal property, but belonged to the joint family of which the assessee is the karta. On applications filed by the Revenue, the Tribunal has referre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tlor and the fact that the assessee was allotted a lesser share in view of the settlement made earlier and the unequal partition clearly showed that the property in question was considered at the time of partition and both the settlement and the partition should be taken into consideration together and there is nothing to show that the property is not a joint family property. We have carefully considered the submissions of learned counsel. The recital in the settlement deed dated March 31, 1960, shows that the father of the assessee had acquired the property out of his own earnings and he was in possession and enjoyment of the property from the date of purchase, namely, May 22, 1936. The property was settled out of love and affection by the settlor in favour of the assessee and various restrictions were stipulated regarding the mode of enjoyment of the property by the assessee. The fact that several restrictions were imposed on the right to enjoy the income from the property and the property itself would clearly show that the property was the self-acquired property of the settlor and if it was a joint family property, there would not have been any settlement of the joint family p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the legal heirs of the assessee, and unless they also joined with the assessee and expressed their intention to convert the settled property into joint family property, it was not possible to convert the property settled in favour of the assessee and his legal heirs into joint family property. That apart, the settlement was made in the year 1960 and the partition was made in the year 1971 and it cannot be assumed that the property was given in the settlement in the year 1960 with an anticipation that the settlor will be allotted an unequal share in the family partition to be made subsequently and several years thereafter. Therefore, it cannot be assumed that the settlement was made in contemplation of the future partition and therefore we are of the view that the deed of partition would not have been in the contemplation of the parties on the preparation of the settlement deed and it cannot be assumed that the settlement deed was made keeping in view the partition to be effected subsequently in the year 1971. Even that apart, the assessee himself was treating the property as his individual property all along. Now let us consider the various reasons given by the Appellate-Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... econd reason that is given by the Appellate Tribunal is that the property under the settlement was given not only for the assessee's benefit, but also for the benefit of the members of the family and the property must be taken as a property of the joint family. We are unable to agree. There was a specific direction as regards the mode of enjoyment of the income from the property and the assessee was given the right to enjoy the property by giving him income and from the income he was required to discharge certain obligations from and out of the income of the property to some of his relatives and so, it cannot be stated that the property as one unit was given to the members of the joint family. It is clear from the settlement deed that the desire of the settlor was to settle the property in favour of the assessee and it is not stated that he would take the property as head of his family. Further, it is well known that in case where the property belongs to the joint family, the right of the members would be fluctuating by the birth and death of the members of the family and the fact that specified shares were given not only to the sisters of the assessee, but also to the sister of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would normally be allotted to him and his branch of the family on partition. In other words, the question would be whether the grantor really wanted to make a gift of his properties or to partition the same. As it is open to the father to make a gift or partition of his properties as he himself chooses, there is, strictly speaking, no presumption that he intended either the one or the other." Applying the tests laid down by the Supreme Court, it is clear from the language of the document, that the father-settlor intended to confer a bounty upon the assessee and it was not given to him as a share in the properties which would have been normally allotted to him on partition. We have seen that the property was the absolute property of the donor and had the partition taken place, this property would not have figured in the partition effected between the members of the family. It is well settled that the father had full power of disposition over the property. On the facts of the case, it is clear the deed of settlement was effected well prior to the deed of partition and, therefore, it cannot be said that the property was settled in favour of the assessee in lieu of the property that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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