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TMI Blog1984 (4) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... ther, one Boraiah Gowder, had purchased from time to time agricultural lands in Konnamalai and Sethiamangalam villages in the joint names of the above assessees and their brother, L. Shanmugam, between 1944 to 1949. As the three brothers were minors at the time of such purchases, they were represented, respectively, by their father, Lingappa Gowder, mother Rajammal and Lingammal, wife of Muniappa Gowder, and the assessees' father's elder brother. The grandfather died in 1949. Properties were continued to be purchased in favour of the said three minors until the year 1955. All these properties were subsequently divided between the three brothers under a partition deed dated October 15, 1972, registered on January 30, 1973. The preamble to the partition deed mentions that ever since the date of purchase, the three brothers were jointly enjoying the properties and that as per the decision of the panchayatdars in 1969, the properties had been partitioned and are being enjoyed separately since 1969. With regard to the income from the properties allotted to Balasubramaniam in the above partition, he claimed that he should be assessed for the assessment years 1972-73 to 1974-75 in the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isting of himself, his wife and children, According to the AAC, the decision of the Supreme Court in Surjit Lal Chhabda v. CIT [1975] 101 ITR 776 will not be applicable to these cases but, on the other hand, the decisions of the Supreme Court in Gowli Buddanna v. CIT [1966] 60 ITR 293 and Narendranath v. CWT [1969] 74 ITR 190 will apply to them. The Revenue took the matter in appeal to the Income-tax Appellate Tribunal contending that as the sale deeds in the names of the assessees and their brother did not indicate that the assessees' grandfather had at the time of the purchases intended that the grandsons should take the properties as ancestral properties and as the recitals in the sale deeds are to the effect that the transferees will have a right of alienation, the grandfather should be taken to have intended that the grandsons should take the properties as their absolute properties, and that, therefore, the view taken by the ITO that the assessment should be in the status of an individual should be taken to be correct. The Tribunal, however, did not agree with the said contention of the Revenue but held that under the Hindu law the presumption is that the assessee and his tw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Gowder which is not the case in the case of the assessee, Balasubramaniam, the question naturally arises whether there is change in the legal incidence. As already stated, the view taken by the Tribunal is that the normal status of every Hindu family is joint and every such family is joint in food, worship and estate. On the basis of the said presumption, the assessee and his two brothers with their father should be taken to constitute joint Hindu family. Thus far, the view of the Tribunal cannot be taken exception to. The Tribunal then proceeds to say that as there is no intention in the various sale deeds that the properties purchased by the assessees' grandfather jointly in the names of the assessees and their brother are to be held by them as their self-acquired properties and as the other recitals in the sale deeds indicate that the properties are to be enjoyed from son to grandson hereditarily, thereby implying that the properties are to be enjoyed by the minors as joint family properties and as the preamble to the partition deed shows that the properties have been impressed with the character of joint family properties before the partition took place between the three bro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Supreme Court in Goli Eswariah v. CGT [1970] 76 ITR 675, the existence of a coparcenary is absolutely necessary before a coparcener can throw into the common stock his self-acquired properties and the separate property of member of a joint Hindu family may be impressed with the character of joint family property, if it is voluntarily thrown by him into the common stock with the intention of abandoning his separate claim therein and the separate property of a Hindu ceases to be separate property and acquires the characteristics of joint family or ancestral property not by any physical mixing with his joint family or his ancestral property but by his own volition and intention by his waiving and surrendering his separate rights in it as separate property. In this case, the fact that the three brothers divided the properties as between themselves without reference to the father all of whom constituted a HUF clearly leads to the inference that the three brothers have not renounced their individual right in the property and bad not treated the properties purchased as that of the family. Merely because the properties have been purchased by the grandfather in the name of his three gra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty will be joint family property of the members of the branch inter se which will be separate property of that branch in relation to the larger family. But, here, at the time of acquisition of property there was no sub-branch, unless the assessees in this case establish that the properties acquired in their names were either ancestral or have become joint family property, the same cannot be claimed to belong to the joint family of which each of the assessees is karta. It is no doubt true, a property may be joint family property without having been ancestral. Where the members as a joint family acquire property by or with the assistance of joint funds or by their joint exertion or in joint business or by a gift or grant made to them as a joint family, such property is the coparcenary property of the persons who have acquired it, whether it is an increment to the ancestral property or whether it has arisen without any nucleus of the ancestral property. In this case, the property came to be acquired in the name of the three brothers by the monies provided by the grandfather. Therefore, it cannot be said that the properties have been given either to the joint family of the three brothe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, the income was chargeable to income-tax in the hands of the assessee as his individual income and not that of the family. Thus, though the Supreme Court held that the assessee, his wife and unmarried daughter may be members of HUF, since the karta of that family is only the sole surviving coparcener, the income of the properties belonging to the family has to be assessed only in the hands of the karta in his individual capacity and not in the status of a HUF. In that case, though the Supreme Court held that there could be a HUF with only one male member, the income from the properties which had been admittedly thrown into the hotch-pot was held assessable only in the hands of the sole co-parcener in his individual capacity and not in the status of a HUF. The said decision of the Supreme Court appears to apply to the case of Balasubramaniam, the assessee in T.C. Nos. 506 to 508 of 1979, for, his undivided family consists of only himself, his wife and two unmarried daughters and so long as there is no other male member, the assessment has to be made only on the assessee in his individual capacity, though he is a karta of the said HUF. But that decision may not apply to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the karta in his individual capacity. But, in this case, the property, the income of which is sought to be assessed, has been held to be separate and not ancestral and, therefore, the assessment has to be made only in the name of the assessee in his individual capacity and not in the status of a HUF. The matter has been recently considered by a Division Bench of this court in CIT v. Balasubramaniam [1981] 132 ITR 529. In that case, there was a gift of self-acquired property of the father to his unmarried son who held it for the benefit of his son's family after marriage. After the said gift, the assessee married and begot a daughter. The question arose whether the income from the gifted property and the accretion thereto is to be assessed in the name of the son in the status of an individual both for income-tax and wealth-tax purposes or he should be assessed in the status of a HUF. This court pointed out that in determining whether the property belongs to the HUF or is individual property, there are two classes of cases, each requiring a different approach, that in cases falling within the rule of Gowli Buddanna's case [1966] 60 ITR 293 (SC), the question would be whether the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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