9911796707
TMI Blog1981 (1) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... le properties in the form of shares in companies, credit balance in banks, etc., and immovable properties including residential house at No. 5, Sunny Park, Calcutta, and that, being desirous, the assessee, thereafter, stated, inter alia, as follows: " That being desirous of vesting the said premises No. 5, Sunny Park, Calcutta, including furniture, fixture, fittings, electric installations, air-conditioning plant attached to or embodied with the said premises, in the joint family comprising of myself, my wife, Mrs. Meena Talukdar and minor sons, Sanjoy, Sanjit and Ranjit, I have on the auspicious day of 1st Baisakh, 1376 (corresponding to 14th day of April, 1969) unequivocally and irrevocably transferred to and thrown into the common hotchpot of the said family the said property being premises No. 5, Sunny Park, Calcutta, more particularly described hereunder." In the assessment proceeding for the relevant year the assessee had claimed that he had thrown his interest in the immovable property along with the movable and immovable properties to the Hindu joint family by declaration dated 19th April; 1969, referred to hereinbefore. The ITO held that the assessee was a Hindu govern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... HUF property. The second question which requires consideration as a matter of course is, whether the property was liable to be included in the total income of the assessee. In order to determine this question it is necessary to find out whether for a Hindu governed by the Dayabhaga School of Hindu law it is possible to blend or impress or throw his property into joint family property. Before we do so it may not be inappropriate to refer to certain decisions of the judicial Committee to which our attention was drawn. We may first refer to the decision on which reliance was placed on behalf of the revenue in the case of Gouranga Sundar Mitra v. Mohendra Narayan Mitra, AIR 1927 Cal 776. There the Division Bench of this court held that under the Dayabhaga school there could not be a joint family consisting of the father and the sons because so long as the father was alive he was the master. The Division Bench observed that the sons might acquire separate properties of their own but they had no concern whatsoever with the joint family property if any property could be so called during the lifetime of the father. Sons, after the death of the father, might form a normal Hindu joint famil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Dayabhaga school of Hindu law prevalent in Bengal there could not be a joint family consisting of the father and the sons. So also brothers living in commensality were not members of a joint Hindu family governed by the Dayabhaga so as to enable the brothers to claim the self-acquisition of a brother in more affluent circumstances as acquisition of the joint family, unless these other brothers proved that they had also contributed to the acquisition of the property claimed by them as acquisition by the joint family. It was, further, reiterated that property which was originally self-acquired may become joint property, if it had been voluntarily thrown into the joint stock with the intention of abandoning all separate claims upon it. A clear intention to waive separate rights must, however, be established and will not be inferred from acts attributable to various causes. The Division Bench further reiterated that where no nucleus of joint property was admitted or proved, the onus was upon the party asserting that the property was not the self-acquired property of an individual member of the family but was thrown into common stock. It has to be borne in mind that while the Division ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f parties, save in so far that by adoption a stranger might be introduced as member thereof. Article 212 along with other articles, which we have set out hereinbefore, in Chap. XII of Mulla's Hindu Law explains that a joint Hindu family consists of, unlike a coparcenary, all persons lineally descended from a common ancestor and includes their wives and unmarried daughters. It is further reiterated that a joint and undivided family is the normal condition of a Hindu society. An undivided Hindu family is ordinarily joint not only in estate but also in food and worship. The existence of a joint estate is not an essential requisite to constitute a joint family and a family which does not own a property may nevertheless be joint family. Where there is a joint estate and the members of the family become separate in estate, the family ceases to be joint. Mere severance in food and worship does not operate as a separation. It has been further explained in art. 212 that a joint or undivided Hindu family may consist of a single male member and widows of deceased male members. The property of a joint family does not cease to be a joint family property belonging to any such family merely becau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or ancestral, as heirs and not by survivorship. Since the sons did not take any interest in ancestral property in their father's lifetime there could be no coparcenary in the strict sense of the word between a father and sons, according to the Dayabhaga law, so far as regards ancestral property. In art. 275 it has been reiterated that since the sons, according to the Dayabhaga law, did not acquire any interest by birth in ancestral property, they could not demand a partition of such property from the father as they could under the Mitakshara law, nor could they call for an account of the management thereof from the father as they could under the Mitakshara law. As great reliance was placed on art. 227, it may not be inappropriate to set out the said article which is as follows: "277. Coparceners according to the Dayabhaga law.According to the Mitakshara law, the foundation of a coparcenary is first laid on the birth of a son. The son's birth is the starting point of a coparcenary according to that law. Thus if a Hindu governed by the Mitakshara law has a son born to him, the father and the son at once become coparceners. According to the Dayabhaga law, the foundation of a copar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... int family property which applied to cases under the Mitakshara law would seem to apply also to cases under the Dayabhaga law. Bat there was no presumption under the Dayabhaga law that property purchased by a son in the father's name, in the father's lifetime and of which the son had been in possession since the purchase, was joint family property. The burden of proof in such a case lay on those who deny the ownership of the son. Where the property purchased by one of the sons was a house even though the father and the sons were living in it, the onus of proving that it was thrown into the common stock, or that they also contributed to the acquisition, was on the other sons. Therefore, the principles that follow from the enunciation of the above distinctive feature mentioned in Mulla's Hindu Law are that coparcenary is different from a joint family. Secondly, right to a property in coparcenary is by the birth of a son. Thirdly, in the strict sense of the term, there could not be, even after the death of the father, in respect of Hindu law governed by Dayabhaga law, any coparcenary property. If we bear the above principles in mind we may appreciate the observations of the judicial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould be relevant while we shall deal with one of the arguments advanced on behalf of the revenue before us. In the case of N. V. Narendranath v. CWT [1969] 74 ITR 190, the Supreme Court had occasion to deal with the concept of coparcenary and joint family in the context of W.T. Act, 1957. There the Supreme Court observed that where a coparcener having a wife and two minor daughters and sons had not received his share of joint family properties on partition, such property in the hands of the coparcener belonged to the joint Hindu undivided family of himself, his wife and minor daughters and could not be assessed as his individual property for the purposes of wealth-tax. It must be reiterated that the Supreme Court was dealing with a case where the question arose in respect of an HUF governed by the Mitakshara school of law. The Supreme Court reiterated that there need not be at least two male members to form an HUF as a taxable unit for the purpose of W.T. Act, 1957. The expression " Hindu undivided family" in the Act was used in the sense in which a Hindu joint family was understood according to the Supreme Court, in the personal laws of the Hindus. Under the Hindu system of law, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filiated to the family by adoption. At p. 782 (of 101 ITR) the Supreme Court again reiterated that a Hindu coparcenary was a much narrower body than a joint family. It included only those persons who acquired by birth an interest in the joint or coparcenary property and referred to the observations of George Rankin J., mentioned hereinbefore. The Supreme Court further observed that outside the limits of coparcenary there was a fringe (if persons, male and female, who constituted an undivided or a joint family. There was no limit to the number of persons who could compose it nor their remoteness from the common ancestor or their relationship with one another. A joint Hindu family consisted of persons lineally descended from a common ancestor and included their wives and their unmarried daughters and reiterated that a joint Hindu family with all its incidence was a creature of law and could not be created by an act of the parties. If that is the position and if it is the creature of law, which, in our opinion, is contemplated under s. 2(31) in the definition of " person " under the I.T. Act, 1961, wherein under cl. 2 of s. 2(31) " person " includes a " Hindu undivided family, the sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cessary in order to bring this about and the only question was one of intention on the part of the father to abandon his separate rights and invest it with the character of joint family property. Now, this observation was made in the context of a Hindu governed by the Mitakshara school of law. Whether the observation of the court that where there was no nucleus of coparcenary property in the Mitakshara school of law it was possible to impress self-acquired property as coparcenary property was correct or not we need not express any opinion in view of certain decisions to which our attention was drawn on behalf of the revenue. But in so far as the Division Bench of the Madras High Court observed that under the Hindu law, in order that a joint family might exist, it was not necessary that there should be a joint family property, in our opinion, the Division Bench of the Madras High Court was expressing the general incidence of Hindu law applicable both to the Dayabhaga and Mitakshara schools of law. To the same effect was the observation of a Division Bench of the Bombay High Court in the case of Damodar Krishnaji Nirgude v. CIT [1962] 46 ITR 1252, in dealing with the question whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... family goes on having its different branches and sub-branches. Each branch starts with the male descendant of the common ancestor and each sub-branch with the male descendant of the head of the branch. While the entire group proceeding from the common ancestor with its several branches and sub-branches in the normal undivided state is a Hindu joint family, each of the branches and each of sub-branches again is a Hindu joint family according to the concept of joint family under the Hindu law. It is, therefore, possible for a main Hindu undivided family to be composed of a large number of branch families, each of the branches itself being a Hindu joint family and so also the sub-branches of those branches. Where a Hindu joint family consists of branch families each of the branch families may possess property which constitutes the joint family property of that branch alone and in which the other branches or the main Hindu family as such have no right or interest." The Division Bench further observed that under the Hindu law any member of a joint family might throw his self-acquired property in the hotchpot of the family to which he belonged and thus make it the joint family prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ock inevitably postulates that the owner of separate property is a coparcener who has an interest in the coparcenary property and desires to blend his separate property with the coparcenary property. The existence of a coparcenary is absolutely necessary before a coparcener can throw into the common stock his self-acquired properties. The separate property of a 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. The separate property of 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. The act by which the coparcener throws his separate property in the common stock is a unilateral act. There is no question of either the family rejecting or accepting it. By his individual volition he renounces his individual right in that property and treats it as a property of the family. No long ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at his separate property as forming part of the coparcenary property. If it appears that property which is separately acquired has been deliberately and voluntarily thrown by the owner into the joint stock with the clear intention of abandoning his claim on the said property and with the object of assimilating it to the joint family property, then the said property becomes part of the joint family estate; in other words, the separate property of coparcener loses its separate character by reason of the owner's conduct and get thrown into the common stock of which it becomes a part. This doctrine, therefore, inevitably postulates that the owner of the separate property is a coparcener who has an interest in the coparcenary property and desires to blend his separate property with the coparcenary property. There can be no doubt that the conduct on which a plea of blending is based must clearly and unequivocally show the intention of the owner of the separate property to convert his property into an item of joint family property. A mere intention to benefit the members of the family by allowing them the use of the income coming from the said property may not necessarily be enough to jus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate and self-acquired property of a Hindu governed by the Dayabhaga school of Hindu law with the joint family character there should be nucleus of a joint property inherited from their ancestors which is in the nature of the coparcenary property. Before we proceed to answer this question we must note that the Tribunal has proceeded on certain aspects of the directive principles of the Constitution. It is true that the directive principles of the Constitution have to be borne in mind but that is the obligation of the State which makes the law. So long as a law is not made it is not necessary to examine how far the question of applicability of the directive principles could be invoked in this case. To meet the argument that the directive principles would not be applicable learned advocate for the revenue drew our attention to the case of Mangru Meya v. Commissioners of the Budge Budge Municipality, AIR 1953 Cal 333. It is not necessary for us to refer to the said decision in this controversy. In this case there is no doubt that the declaration has not been disputed. The declaration is categorical and by the conduct and act of the assessee the self-acquired property of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
