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TMI Blog1975 (9) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... her of the assessee consisted of loans advanced by the deceased to certain parties and also bank deposits. The assessee inherited one-half share of the said loans and bank deposits. Income by way of interest on the one-half share amounted to Rs. 4,588 in the year of account relevant to assessment year 1966-67 and to Rs. 4,986 in the year of account relevant to assessment year 1967-68. The assessee contended before the Income-tax Officer that the interest income should be assessed as income of the Hindu undivided family consisting of the deceased himself, his sons and his wife. The Income-tax Officer rejected the contention of the assessee and following the decision of the Allahabad High Court in Commmissioner of Income-tax v. Ram Rakshpal, Ashok Kumar [1968] 67 ITR 164 (All) held that since the father had his individual properties, the question of treating the said individual properties in the hands of the assessee as Hindu undivided family properties did not arise. According to the Income-tax Officer, the Mysore High Court in the case of Commissioner of Income-tax v. Smt. Nagarathnamma [1970] 76 ITR 352 (Mys) had also confirmed the view of the Allahabad High Court. Consequently, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rakshpal, Ashok Kumar, who was the assessee-firm before the Allahabad High Court. Durga Prasad also left behind him a widow, Jai Devi, and a daughter, Vidyawati. Upon his death, Vidyawati took her 1/3rd share of the property left by Durga Prasad, but his widow, Jai Devi, and his son, Ram Rakshpal, entered into a partnership with 2/3rd of the assets of the business known as Murlidhar Mathura Prasad which was, as already indicated, the separate business of Durga Prasad. A partnership was entered into between Jai Devi and Ram Rakshpal and its terms were incorporated in a deed which was duly registered on 23rd April, 1958. In the assessment year 1959-60, immediately following the death of Durga Prasad, the question arose whether the income from the one-third share which had come to Ram Rakshpal from Durga Prasad should be assessed as part of the income of the Hindu undivided family of Ram Rakshpal, Ashok Kumar or as income from the separate property of Ram Rakshpal. The Income-tax Officer assessed it as the income of the Hindu undivided family applying the well-recognised principle of Hindu law that the property left by the grandfather in the hands of the father is ancestral property i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Hindu Succession Act which derogates from the provision of old Hindu law regarding the property which comes to a Hindu son in a Mitakshara a family on the death of his father by succession. Under section 6 provision is made for devolution of interest in coparcenary property. When a male Hindu dies after the commencement of the Hindu Succession Act, having at the time of his death an interest in a Mitakshara coparcenary property, his interest in the property shall devolve by survivorship upon the surviving members of the coparcenary and not in accordance with the Hindu Succession Act. Provided that, if the deceased had left him surviving a female relative specified in Class I of the Schedule or a male relative, specified in that class, who claims through such female relative, the interest of the deceased in the Mitakshara coparcenary property shall devolve by testamentary or intestate succession, as the case may be, under the Act and not by survivorship. Similarly, under section 30 of the Hindu Succession Act, provision is made for the testamentary succession and it has been provided that any Hindu may dispose of by will or other testamentary disposition any property, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the two classes, then upon the agnates of the deceased and if there is no agnate, then upon the cognates of the deceased. The result, therefore, is that so far as the property is concerned, it devolves according to the provisions of the Chapter in which section 8 is located but that does not again deal with the character of the property in the hands of the person to whom the property devolves by succession. With respect to the learned judges of the Allahabad High Court, it is impossible to read in to the words of section 8 any provision which interferes with the scheme of Hindu law as it prevailed prior to the enactment of the Hindu Succession Act. Neither section 6 nor section 8 nor section 30 affect this principle of Hindu law as to in what capacity or in what character the son would enjoy the property once he received it from his father in succession. We find the following observations in Sir Dinshaw Mulla's Commentaries on Hindu Law, Fourteenth edition, at page 847 : " It may be appropriate to draw attention to certain general principles of inheritance governing the old law before stating the object and effect of the rules laid down in this section and the far-reaching chan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any member of the coparcenary and by the Hindu Women's Rights to property Act, 1937, which conferred new rights on widows of coparceners. The highest authorities on Hindu law took the view that the Mitakshara coparcenary had lost a number of its characteristics and should, therefore, be abolished The power of free disposition of property is recognised in every system of law and it was time for Hindu law to fall in line. Probably the best solution would have been to abolish the ancient legal formulae of acquisition of right by birth and devolution by survivorship since the logical way was to assimilate the Mitakshara to the Dayabhaga in this respect. This could also have had the merit of equable treatment of the nearest female heirs of a coparcener and of bringing about uniformity in the law in all parts of India. But there was some strong sentiment in favour of the retention of the Mitakshara coparcenary even in an attenuated form and the rules laid down in this section are a compromise having some of the merits and all the demerits which attend such adjustive legislation. " The illustrations set out at page 849 of the report clearly indicate what is the effect of the enactment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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