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TMI Blog1977 (11) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... eration in the reference before us was whether the income from the firm of Messrs. Teju Kaya Co. pertaining to the share of Shri Khimji Teju Kaya was the individual income of the said Shri Khimji or the income of a Hindu undivided family of which Shri Khimji Teju Kaya was the karta. The assessee desired that the status should be accepted as an individual as against the department's contention that the income should be clubbed with and assessed in the hands of the HUF of Shri Khimji Teju Kaya as its income. The late Rao Saheb Teju Kaya acquired by his own exertions large properties, both movable and immovable. The fact that alI the properties earned by him were his self-acquired properties was not in dispute. At the time of his death on April 24, 1928, he was a partner in the firm of M/s. Teju Kaya Co. There were two other partners, one of them being his son-in-law. The shares of the three partners were : Teju Kaya, Rs. 0-6-3, Nensi Bhojraj, Rs. 0-5-6 and Devji Dharsi Rs. 0-4-0. The balance of 3 pies was for charity. The business of the firm was principally that of contractors and this firm came into existence on October 24, 1919, though the partnership deed itself was execute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 4, 1927, left by Rao Saheb Teju Kaya was referred to and the will was produced before the AAC. A copy of this will is annexed as annexure " F ". The AAC directed the Income-tax Officer to report, inter alia, on the legal consequences of the will and pursuant to these directions the ITO relying upon the decision of the Supreme Court in Arunachala Mudaliar v. Muruganatha Mudaliar [1954] SCR 243 ; AIR 1953 SC 495, stated that the real intention of the testator was that the properties bequeathed by him should belong to his son not as an individual but as karta of HUF. On receipt of this remand report, the matter was again heard by the AAC. As far as the will was concerned, the AAC commented upon the will not having been mentioned at any stage right from 1928 to 11th May, 1961, as also on the said will not having been probated. The AAC was of the view that even if the will was taken to be a genuine document, it was ineffective. Relying upon the fact that the assessee had himself treated the income from the firm as joint family property, the AAC upheld the decision of the ITO. Being aggrieved with the order, the appellant preferred appeals to the Tribunal. It was urged that in the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tus of the assessee and the Tribunal permitting the assessee to alter his status in view of the earlier return filed, where the income was shown as that of the HUF of which Khimji was the karta. The Tribunal did not accept the questions submitted by the Commissioner, but referred merely the following question to us which is the question which is required to be considered and answered : " Whether, on the facts and in the circumstances of the case, the share income from the firm of M/s. Teju Kaya Co. belonged to Khimji in his individual capacity or as representing the HUF of which he was the karta ? " A perusal of the Tribunal's consolidated order and of the statement of case reveal that the Tribunal has come to the following factual conclusions, which conclusions we are bound to accept and act upon : (i) That the will dated September 4, 1927, was the genuine will of Rao Saheb Teju Kaya ; (ii) That at the time when the earlier returns were filed in which returns the income from the firm was shown as belonging to the HUF of which Khimji Teju Kaya was the karta, the concerned parties were not aware of the existence of the will. The Tribunal has also observed in its order th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther member of the coparcenary, not even his male issue, acquires any interest by birth. The owner may sell it, he may make a gift of it, or bequeath it by will, to any person he likes. On his death, it would pass by succession to his heirs and not by survivorship. If such Hindu dies intestate and the property is inherited by his male issue, then in such a case it would appear that in the hands of the son, grandson or great grandson, the property would become ancestral property. The position, however, would be different where a Hindu, instead of allowing his self-acquired or separate property to go by descent, makes a gift of it to his son, or bequeaths it to him by will. In such a case, a question arises whether such property is the separate property of the son, or whether it is ancestral in the hands of the son as regards the son's male issue. This question had resulted in a judicial controversy between the different High Courts in India and came to be considered by the Supreme Court in C. N. Arunachala Mudaliar v. C. A. Muruganatha Mudaliar [1954] SCR 243; AIR 1953 SC 495. In the said decision, the Supreme Court ended the controversy among the High Courts. The Madras, Patna and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ors and assignees ", these words really indicated that the objects of the bounty were the sons as heads of their respective families. This contention was rejected by the Supreme Court which observed that there was nothing in the document to suggest that the interest transferred to the sons was limited in any way. Arunachala's case [1954] SCR 243 ; AIR 1953 SC 495 was considered by a Division Bench of this High Court in Commissioner of Income-tax v. Gordhandas K. Vora [1974] 96 ITR 50 (Bom). This decision also examines the question whether the separate or self-acquired property had been thrown into the common stock and what was required for this purpose . In connection with the argument of the property being thrown into the common stock, the views expressed in Mulla's Hindu Law to the effect that a clear intention to waive separate rights must be established and this could not be lightly inferred, was, approved. This brings us to a consideration of the will of Teju Kaya which is to be found as annexure " F " to the statement of case. The original will is in Gujarathi and the translation has been annexed as annexure " F ". Clause 10 pertains to the partnership business of Teju Ka ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 975] 99 ITR 1. We are unable to find in the will any provision limiting Khimji's interest in any manner whatsoever to suggest that what the testator was doing was bequeathing the property pot to Khimji absolutely but to Khimji and his male issue indicating that Khimji was to have the property, although as part of testamentary succession, in the same manner as Khimji would have it on intestacy. There is nothing in the will to warrant any such conclusion and it would be rather unusual for a will to be made to subserve the same purpose as would be achieved on intestacy. If at all, commonsense would require that a contrary approach be accepted. It is also not possible to accept the arguments to be found in paragraph 7 of the order of the AAC which Mr. Joshi adopted as his own in this reference. It is clear from the subsequent two partnership deeds, the first wherein Vejbai was inducted as a partner, and the second by which Khimji became a partner in the firm of Messrs. Teju Kaya Co. that these were not separate and totally distinct partnerships unconnected with and disassociated from the earlier firm of Teju Kaya, the share of which was disposed of by clause 10 of the will of Teju ..... X X X X Extracts X X X X X X X X Extracts X X X X
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