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TMI Blog1995 (1) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... On April 14, 1971, there was a total and complete partition of the immovable properties. This partition was accepted by the Income-tax Officer by an order passed under section 171 of the Income-tax Act, 1961, on March 9, 1973. On October 1, 1979, Vaiyapuri Chettiar and V. Rajkumar executed an instrument called "deed of declaration of reunion" on a stamp paper of Rs. 50. This document recited the previous partitions in the family and the desire and agreement of the parties for effecting a reunion so as to constitute a joint Hindu family of the parties and to constitute a joint family fund by virtue of such reunion so as to form a nucleus thereof by bringing in any or some of the properties allotted on partition of the erstwhile joint family and under this declaration the father and son brought a fixed deposit of Rs. 50,000 each kept with Rajkumar Chit Fund (P.) Ltd., as their contribution for the reunited joint family and declared their having reunited and the reunited joint family alone having the rights in respect of those assets totalling Rs. 1,00,000. Consequently, there were three units, firstly, Shri Vaiyapuri Chettiar with the separated assets claiming to be the karta of a sm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vival amounts to a creation of a new joint family with a fresh nucleus. Thirdly, it was contended that when the parties have agreed that they will reunite, the fact that they get a tax benefit cannot invalidate such a reunion. Lastly, it was submitted that the amendment recently introduced cannot affect the transaction when such a transaction was valid in law. The Tribunal, following the principles laid down by the Supreme Court in the case of Bhagwan Dayal v. Mst. Reoti Devi, AIR 1962 SC 287, held that by an agreement, the parties can create a reunion with the property brought in as the joint family property. The Tribunal accepted that the reunion can be created with limited items of properties and, according to the Tribunal, it is not necessary that all the properties belonging to the erstwhile Hindu undivided family should be brought into the reunited joint family for the purpose of making the reunion a valid one. The Tribunal also pointed out that when the assessees were entitled to reunion as per their personal law, it cannot be said that it is a device to reduce the tax burden. Ultimately, the Tribunal held that the assessment should be made by accepting the reunion in acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is also recognisable especially, when a reunion of some of the members is already recognised. When the parties have agreed that they will reunite the fact that they would get tax concession cannot invalidate such a reunion. The amendment introduced to section 171 cannot affect the transaction when such a transaction was valid in law. We have heard the rival submissions. The conditions precedent for a valid reunion under the Hindu law are : 1. There must have been a previous state of union, reunion is possible only among the persons who were, on an earlier date, members of a Hindu undivided family. 2. There must have been a partition in fact ; 3. The reunion must be effected by the parties or some of them who had made the partition ; and 4. There must be a junction of the estate and the reunion of property because a reunion is not merely an agreement to live together as tenants-in-common. Reunion is intended to bring about a fusion in the interest and in the estate among the divided members of an erstwhile Hindu undivided family so as to restore to them the status of a Hindu undivided family once again and, therefore, reunion creates a right on all the reuniting coparcene ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9] pages 204 and 205 ; Vivadachintamani, Gaekwad's Oriental Series, volume XCIX pages 288 and 289). But even so, there is no controversy that a reunion is possible only among persons who were, on an earlier date, members of a Hindu undivided family. Reunion, therefore, is a reversal of the process of partition. Therefore, it is reasonable to take the view that reunion is not merely an agreement to live together as tenants-in-common, but is intended to bring about a fusion in the interest and estate among the divided members of an erstwhile Hindu undivided family so as to restore to them the status of a Hindu undivided family once again and, therefore, a reunion creates a right in all the reuniting coparceners in the joint family properties, which were the subject-matter of a partition, among them to the extent they were not dissipated away before the date of reunion. That this would be the legal consequence of a genuine reunion is forcefully brought out by the text of Brihaspati, which provides ' where coparceners have again reunited through affection they shall mutually participate in each other's properties.' Mitakshara states that mixing up of divided properties is the effect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arties for effecting a reunion so as to constitute a joint Hindu family of the parties and to constitute a joint family fund by virtue of such a reunion so as to form a nucleus thereof by bringing in any or some of the properties allotted on partition of the erstwhile joint family and under the declaration the father and son brought a fixed deposit of Rs. 50,000 each, kept with Rajkumar Chit Fund (P.) Ltd., as their contribution for the reunited joint family and declared their having reunited and the reunited joint family alone having the rights in respect of those desposits totalling Rs. 1,00,000. In such a case, the entire property of the erstwhile Hindu undivided family was not brought into the reunited joint family, as per the decisions cited supra, and unless the entire properties of the erstwhile joint family were brought into the reunited joint family, the reunion is not valid and any clause restricting from bringing the entire properties belonging to the erstwhile joint family will be considered to be invalid. Therefore, in the present case, a clause contained in the declaration of reunion giving option to whatever property they like to bring in, in the reunited joint. fami ..... X X X X Extracts X X X X X X X X Extracts X X X X
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