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TMI Blog1979 (9) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... his share. This amount was invested by the assessee in the firm, Ayodhya Prasad Gopinath. At the time when he became a partner of this firm, he was unmarried but during the previous year relevant to the assessment year 1971-72, he married and it was for this reason that he claimed that the share income received from the firm should be taxed in the hands of the HUF consisting of himself and his wife. The ITO, however, did not accept this plea and taxed him in the status of an individual as in the earlier assessment years. The decision of the ITO was reversed by the AAC. An appeal filed by the department has, however, succeeded. The Tribunal has now, at the instance of the assessee, referred the following question for the opinion of this cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... individual coparcener, a HUF comes into existence so as to entitle an assessee to claim the advantage of being assessed in the status of a HUF. In order to determine these questions it will be useful to refer to certain decisions of the Supreme Court which have considered the difference between a coparcenary and a HUF and have also indicated the general category of persons who go to constitute a HUF. We will begin by considering the decision of the Supreme Court in the case of Gowli Buddanna v. CIT [1966] 60 ITR 293 (SC). One of the questions that their Lordships had to consider in that case was as to whether it was necessary that there should be two male members in order to constitute a HUF. While considering this controversy their Lordsh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he expression ' Hindu undivided family ' in the Income-tax Act is used in the sense in which a Hindu undivided family is understood under the personal law of Hindus. Under the Hindu system of law a joint family may consist of a single male member and widows of deceased male members, and apparently the Income-tax Act does not indicate that a Hindu undivided family as an assessable entity must consist of at least two male members." The question as to whether a single member, male or female of a partitioned family would be a HUF for purposes of the I.T. Act was left unanswered. The principle relevant for the purposes of this case is that a Hindu joint family consists not only of the male members, but also of their wives and unmarried daughter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eir Lordships of the Privy Council in Kalyanji's case [1937] 5 ITR 90 lend support to the first contention, for it was observed : " The existence of wife or of a wife and daughters does not make income derived from the ancestral property of a Hindu, income of a Hindu undivided family for purposes of assessment to super-tax. " This decision, however, has been considered in detail in Gowli Buddanna's case [1966] 60 ITR 293 (SC) and does not appear to have been approved, for, instead of following that decision, they approved of the view expressed by a subsequent decision of the Privy Council in the case of Attorney-General of Ceylon v. AR. Arunachalam Chettiar [1957] AC 540 ; [1958] 34 ITR (ED) 42; 3 EDC 825. In that case, the sole surviving ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... undivided family into the separate property of the surviving coparcener.' To this it may be added that it would not appear reasonable to impart to the legislature the intention to discriminate, so long as the family itself subsists, between property in the hands of a single coparcener and that in the hands of two or more coparceners. It was urged that already the difference is there since a single coparcencer can alienate the property in a manner not open to one of several coparceners. The extent to which he can alienate so as to bind a subsequently adopted son was a matter of much debate. But it appears to their Lordships to be an irrelevant consideration. Let it be assumed that his power of alienation is unassailable; that means no more ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the character of the family property held by the sole coparcener. But once the sole surviving coparcener marries, a HUF comes into existence, for the wife along with her husband constitutes a joint Hindu family and as we have seen earlier there is no difference between a joint Hindu family and a HUF. We find support for this view from the decision of the Supreme Court in C. Krishna Prasad v. CIT [1974] 97 ITR 493, where it was held that a family signifies a group and it was essential, therefore, that there should be a plurality of persons. It was, as such, held that a single person, whether male or female cannot be treated as a HUF for the purpose of the I.T. Act. It was observed at page 496 : " It would follow from the above that the wo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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