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TMI Blog1977 (6) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... tion: "On April 1, 1970, I had voluntarily relinquished and waived all my individual rights in the abovesaid 1/6th shares held by me in the two firms referred to above in favour of the Hindu undivided family .................. and the said share and the income derived from April 1, 1970, belongs only to the Hindu undivided family and is being received by me only as the karta of the Hindu undivided family. To remove all doubts, I hereby declare that 1/6th shares held by me in the two firms, Messrs. Waverly Estates and Messrs. Caladonia Estates, belong to the Hindu undivided family from April 1, 1970." The other documents and declarations in respect of other respondents are not before us. In the case of the respondent in T.C. No. 459 of 1974, it is clear from the assessment order that he has neither a son nor a daughter and that the family consists of himself and his wife. On the basis of the said declaration, the respondents sought exclusion, from their respective individual returns, of their share income from the two firms. During the relevant year, there was only a net loss in the two concerns. The Agricultural Income-tax Officer, while making the respective assessments, h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the contentions taken before it to the contrary. In the case of a genuine transaction in which a member of a Hindu undivided family throws his interest in the partnership firm into a common hotchpot, the problem that requires consideration is whether the provisions of section 9(2) of the Agricultural Income-tax Act have any scope for application. Section 9(2)(a)(iii) and (iv) are relevant in the context of the present case. The provision to the extent relevant reads as follows: "9. (2) In computing the total agricultural income of any individual for the purpose of assessment, there shall be included,-- (a) so much of the agricultural income of a wife or minor child of such individual as arises directly or indirectly--...... (iii) from assets transferred directly or indirectly to the wife by the husband otherwise than for adequate consideration or in connection with an agreement to live apart; or (iv) from assets transferred directly or indirectly to the minor child not being a married daughter by such individual otherwise than for adequate consideration." From the opening words of the provision, it is clear that it would apply only to the case of an "individual". There ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sai Mallappa [1961] 3 SCR 779, the doctrine of throwing into the common stock 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 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. 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 individua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me received by the assessee in that case, after the said document of 1956, should be assessed to income-tax in the status of a Hindu undivided family. It was held that "since until the birth of a son the personal law of the assessee, namely, the Hindu law, regarded the assessee as owner of the said immovable property and the income therefrom as his income even after the property was thrown into the family hotchpot, the income was chargeable to income-tax in the assessee's hands as his individual income and not as the income of the family". We do not consider that the said case has any application to the facts of the case before us. It may be seen that in the said case, the assessee had only a wife and an unmarried daughter. There was no coparcenary. In the case before us, there is a minor son with whom the respondents form a coparcenary. The principle applicable to the sole surviving coparcener could not be applied to a coparcenary having another male member. We have, therefore, to examine the position in the light of the other decisions brought to our notice by Mr. Jayaraman. In Commissioner of Income-tax v. Kalu Babu Lal Chand [1959] 37 ITR 123 (SC), the karta of a Hindu undivi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in certain managing agency firms. There was an oral partition between him and the other members of his family as a result of which one pie share was allotted to his unmarried daughter and the balance of the interest of the family was partitioned between himself, his three minor sons and his wife. The question was whether the share income from the firm was liable to be taxed in the hands of the family or in the hands of the respective members. Hidayatullah J. (as he then was), speaking for the court, observed at page 209: "While it was joint, the department could treat the income as that of the family; but after partition, the department could not say that it was still the income of the Hindu undivided family, when there was none. In the face of the finding that this was a genuine document and not a sham, and that it effectually divided the income and, in the circumstances, the assets, the question answers itself in the negative, that is to say, that there were no materials to justify the finding that the income in the share of the commission agency of the mills was the income of the Hindu undivided family." Subsequently also in V. D. Dhanwatey v. Commissioner of Income-tax [19 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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