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TMI Blog1982 (11) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... s the karta, his two major sons, Nirmal and Surendra, and three minor sons, Janardan, Srinivas and Pundarikakshya. Admittedly, the wife of Satyanarayana Murty was in existence at that time, but there was no material to show whether a share in the HUF property was allotted to her. An application made under s. 171 of the Act was accepted and the ITO, for the assessment year 1968-69, recorded the following order: " As I have no other opinion to the contrary, partial partition of the HUF business as claimed by the assessee is allowed. " For the assessment year 1974-75, the assessee filed a return showing his status as individual. The only source of income was the share of profits received from Sri Durga Stores. The ITO found that there were two minor sons of the assessee who were also partners of the firm, Sri Durga Stores. He, therefore, added to the assessee's disclosed income the share income of the two minor sons amounting to Rs. 17,304 by invoking the provisions of s. 64(1)(ii) of the Act. The assessee was assessed on an income of Rs. 27,193. On appeal before the AAC, the assessee contended that his status should have been an HUF and the share of income of the two minor sons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the sole coparcener, there could be no status of an HUF when the assessee and his wife were the only two persons in the family. He, therefore, came to the conclusion that the assessee's status was that of an individual. In view of the difference of opinion, the matter was referred to a third Member and he concurred with the view taken by the Accountant Member that the assessee's status should be that of an HUF and the share income of the two minor sons would not be includible in the computation of the assessee's income. In spite of notice, the assessee has not entered appearance. The question that has been raised in this case seems to have been squarely covered by the decision of the Supreme Court in the case of Surjit Lal Chhabda v. CIT [1975] 101 ITR 776 (SC). In Chhabda's case there were three members in the family: Chhabda himself, his wife and an unmarried daughter. " Kathoke Lodge ", which was the personal property of Chhabda, was claimed to have been thrown into the family hotchpot with a view to impressing it with the character of joint family property. The income received from the said property was sought to be assessed in the hands of the HUF consisting of the three ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is living together, it is almost impossible not to form a joint Hindu family. It is the family relation, the sapinda relation, which distinguishes the joint family, and is of its very essence.' Karsondas Dharamsey v. Gangabai [1908] ILR 32 Bom 479, 493. See also Hindu Law in British India by S. V. Gupte, second edition, page 59. 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' (eighth edition, page 240), '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 fam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Having referred to these two cases, the learned judges in Chhabda's case [1975] 101 ITR 776, 784 (SC), proceeded to say: "In both of these cases, Gowli Buddanna's [1966] 60 ITR 293 (SC) and Narendranath's [1969] 74 ITR 190 (SC), the assessee was a member of pre-existing joint family and had, in one case on the death of his father and in the other on partition, became the sole surviving coparcener. But the decision in those cases did not rest on the consideration that there was an antecedent history of jointness. The alternative argument in Gowli Buddanna's case was an independent argument uncorrelated to the pre-existence of a joint family. The passage which we have extracted from the judgment of Shah, J. in that case shows that the decision of this court did not proceed from any such consideration. The court held in terms categorical that the Hindu undivided family as an assessable entity need not consist of at least two male members. The same is true of the decision in Narendranath's case. Thus, the contention of the Department that in the absence of a pre-existing joint family, the appellant cannot constitute a Hindu undivided family with his wife and unmarried daughter m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SC), so long as the property which was originally of the joint Hindu family remains in the hands of the widows of the members of the family and is not divided amongst them. In cases falling within the rule in Kalyanji's case [1937] 5 ITR 90 (PC), the question to ask is whether property which did not belong to a subsisting undivided family has truly acquired the character of joint family property in the hands of the assessee. In this class of cases, the composition of the family is a matter of great relevance for, though a joint Hindu family may consist of a man, his wife and daughter, the mere existence of , a wife and daughter will not justify the assessment of income from the joint family property in the status of the bead as a manager of the joint family. The appellant's case falls within the rule in Kalyanji's case since the property, before it came into his hands, was not impressed with the character of joint family property. It is of great relevance that he has no son and his joint family consists, for the time being, of himself, his wife and daughter. Adverting to Kathoke Lodge, their Lordships further stated (p. 795): "Kathoke Lodge was not an asset of a pre-existing jo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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