1. The question referred for our decision is :
'Whether, on the facts and in the circumstances of the case, the income from property known as 'Kathoke Lodge' was to be assessed separately as the income of the Hindu undivided family of which the assessee was the Karta ?'
2. The question arises upon the following facts : Surjitlal Chhabda, the assessee, has three sources of income. He has a share in the profits of the two firms, Messrs. Silver Screen Enterprises, Amritsar and Messrs. L. M. Chhabda & Sons, Ahemedabad. Some interest accrues to him from banks and he has the income from the property known as 'Kathoke Lodge', which is now the subject-matter of the reference. We are concerned in this reference with the assessment years 1957-58, 1958-59 and 1959-60 corresponding to the account years ending December 31, 1956, December 31, 1957 and December 31, 1958. Till the present dispute arose in the assessment year 1957-58 and the subsequent years the assessee was always assessed in the status of an individual.
3. 'Kathoke Lodge' was admittedly the self-acquired property of the assessee, but on 26th January, 1956, the assessee made a certain declaration on affidavit and signed it before a Presidency Magistrate declaring it to be property belonging to a Hindu undivided family. The relevant declaration was as follows :
'1. I have this day thrown my separate and self-acquired immovable property known as 'Kathoke Lodge' situated at the Main Road, Dadar, Bombay-14 into the family hotchpot and will hereinafter hold the said property as Karta of my Hindu joint family.
2. My Hindu joint family for the time being consists of myself, my wife and one child.
3. The family hotchpot for the time being consists of the said immovable property. I have made the present declaration with the intention to impress on my self-acquired property the character of the Hindu joint family property.
4. I solemnly declare that hereafter the said immovable property belongs to my Hindu joint family and I will hold the said property as Karta of my family consisting for the time being of myself, my wife and one child.
Sd. Surjitlal Chhabda.'
4. It is admitted position that the child referred to in the above declaration is a daughter.
5. On the strength of this declaration for the assessment year 1957-58 onward the assessee claimed that the income from the property should be assessed in the status of a Hindu undivided family. He contended that he had thrown the property into the common stock or hotchpot of the Hindu undivided family consisting of himself, his wife and his daughter of which he was the Karta and had abandoned all claims to hold Kathoke Lodge as a separate property.
6. The tax authorities and the Tribunal have concurrently turned down this contention of the assessee, for different reasons. The Income-tax Officer held that there was no nucleus of Hindu undivided family property and therefore there was no property with which the assessee could mingle this separate property of his in a common hotchpot and that there could not be a Hindu undivided family without there being a Hindu undivided family property. When the assessee carried the matter in appeal to the Appellate Assistant Commissioner, the Appellate Assistant Commissioner did not agree with the finding of the Income-tax Officer that without there being a Hindu undivided family property there cannot be a Hindu undivided family, nor with the conclusion of the Income-tax Officer that, since there was no nucleus of Hindu undivided family property, the property could not be thrown into the common stock. The Appellate Assistant Commissioner went upon a more fundamental ground. He observed that, no doubt, the assessee had made a declaration but it had to be seen whether it was actually acted upon and that there must be some evidence to show that after the declaration the property was differently dealt with from the date on which it was alleged there was a change in the character of the property, but held that there was no such evidence forthcoming. On the other hand, he pointed out that the assessee continued to deal with the income from the property in exactly the same manner as he dealt with that income when it was separate property. He used to deposit it in the same bank account in which he was depositing it when it was his separate property. though subsequently he did open a separate bank account in his own name as the karta of the Hindu undivided family. Secondly, the Appellate Assistant Commissioner held that, even assuming that the property was thrown into the common stock by the assessee, or, in other words, that it was a Hindu undivided family property 'the income from the said property can still be considered (sic : to be) in the appellant's hands, he being the sole male member' and, in this respect, the Appellate Assistant Commissioner relied upon the decision of the Privy Council in Kalyani Vithaldas v. Commissioner of Income-tax Officer.
7. In a further appeal by the assessee the Tribunal first of all considered the finding of the Appellate Assistant Commissioner that the assessee had not acted upon the declaration and that in fact 'there was no such transfer of property to the joint family'. The Tribunal did not uphold that finding. The Tribunal held that the assessee's declaration manifested his intention to impress his self-acquired property with the character of a joint Hindu family and that the fact that he had deposited the income of the property in hid personal account for a few years was a matter with which they were not concerned. The assessee was, however, the karta of the joint Hindu family, and, as such, 'this incident has no bearing on the question as to how he is treating the income received by him from that property'. Another point was also taken on behalf of the department before the Tribunal that the effect of the declaration was no more than to bring about a transfer and the transaction would be covered by section 16(3) (b) of the Income-tax Act, 1922, but the Tribunal repelled that contention by saying that the change has been brought about by the unilateral act of the assessee and does not constitute any transfer in the eye of the court. The argument based upon section 16(3) (b) was thus repelled and has not been pressed before us. On the principal question as to the effect of the declaration the Tribunal found :
'The assessee, by impressing upon the self-acquired property the character of joint Hindu family property has, has, no doubt, tried to vest the property in the joint Hindu family, but it does not, in any way, change the right which he possesses the respect of that property. In respect of his self-acquired property, he has got an absolute right of disposal. Even when the property has been impressed with the character of joint Hindu family property, he is possessed of the same right since he is the sole surviving coparcener. He cannot better his position from a person who already owns ancestral property, but is the sole serving coparcener. For that purpose, that property is treated in law as his separate property.'
8. It is this finding which, it has been held, gives rise to a question of law referred.
9. On behalf of the assessee Mr. Khanna has raised several broad questions. He has first of all contended that no doubt in the present case the property was originally self-acquired property of the assessee and though the assessee's family consists only of himself, his wife and his unmarried daughter, still it is open to any Hindu male by making a declaration of his intention to throw his self-acquired property into the common stock or hotchpot, convert it into the property of the Hindu undivided family. For effectuating such an intention, counsel urged, it is not necessary that there should be an ancestral nucleus or any property belonging to a Hindu undivided family that there should be a male member in that family along with the person who brings his self-acquired property into the hotchpot. He has urged that upon the decided cases it is clear that a Hindu undivided family as referred to under the Indian Income-tax Act is the same thing as the Hindu joint family under the Hindu law though it may be different from a Hindu coparcenary. So viewing it he urged that a Hindu joint family may consist of a male member, his wife and his daughter only and it is not necessary that there should be more than one male. A male Hindu can with only female members constitute a joint Hindu family, and in the present case, since the assessee's family consists of himself, his wife and unmarried daughter, that unit can constitute a Hindu undivided family. Counsel, therefore, urged that every requirement necessary for holding that Kathoke Dodge, which was separate property at one time, has now become the property of a Hindu undivided family has been fulfilled by the assessee and that, therefore, it must be held that the assessee successfully imparted to it the character of a Hindu undivided family property. He urged that the correct position in law and upon the authorities was not grasped by the Tribunal and therefore its finding is vitiated.
10. On behalf of the department, on the other hand, it has been urged by Mr. Joshi that it is contrary to the basic concept of a Hindu undivided family that a single male member can constitute a Hindu undivided family along with female members. The fundamental concept of Hindu law is that a joint family consists of lineal descendants of a common male ancestor and, though a Hindu undivided family may include a wife and unmarried daughter, a sole male member cannot form a joint Hindu family along with the female members and it is essential that there must be more than one male who is capable of claiming partition or a division of the family. Then and then only can it be said that there has been formed a joint Hindu family. In the alternative he urged that there must at least be the possibility of bringing into being a male member other than the person bringing his separate property into the hotchpot, as, for instance, the widow of a coparcener who is capable of adopting a son to her deceased husband. A husband, wife cannot form a joint Hindu family nor for that matter a husband, wife and unmarried daughter.
11. A further submission which is of the same nature as the above contention was that for the operation of the doctrine of blending self-acquired property with the property of a joint Hindu family, it was an essential precondition that there should exist not only a coparcenary but also a coparcenary property. Counsel did not after some discussion press that there should necessarily be coparcenary property, but he did insist that there should be a coparcenary before the doctrine of blending can operate. He relied for this contention upon an observation in the decision of the Supreme Court in Mallesappa v. Mallappa. He pointed out that the whole concept of blending property with that of the joint family depends on the male member being capable of sharing in some property with another male member with whose property he blends his own property. He cannot blend his property where there is nothing to blend it with, nor with persons who are not themselves capable of sharing in his property. Therefore, it is essential that there must be someone capable of sharing in the blended property with the person whose property it is, and in this case there was none because there were only the wife and the unmarried daughter of the assessee.
12. Several authorities were referred to on either side in support of their respective contentions. We do not, however, propose in deciding this reference to go into the larger question as to whether the property of the assessee, which was originally self-acquired property, assumed the character of a Hindu undivided family property, as to what are the incidents of a Hindu undivided family property and under what circumstances can separate property become Hindu undivided family property. Some of these questions have been directly answered in the authorities which were cited before us.
13. The question referred is confined to the 'income' from Kathoke Lodge. We would, therefore, without going into these larger questions, prefer to rest our decision on the short point whether the income from the property known as Kathoke Lodge after the declaration was the income of a Hindu undivided family and in this respect whether the principle laid down by the Privy Council in Kalyanij's case was correctly applied.
14. First as to the decision of the Privy Council in Kalyanji Vithaldas v. Commissioner of Income-tax. That was a case which went up to the Privy Council from the decision of the Calcutta High Court in Moolji Sicka, In re and it is an important pronouncement upon the first point before us. In Kalyanji's case the Privy Council was considering cases of 6 persons, 3 of whom, namely, Moolji, Purshottam and Kalyanji, were each members of a Hindu undivided family. Moolji had two sons, Kanji and Sewdas, by his first wife and one son by his second wife, Mohandas, and a brother, Purshottam. There was also another family of which one Vithaldas was the karta. Vithaldas had three sons, Kalyanji, Chaturbhuj and Champsi. Kalyanji had a wife, three sons and a daughter. Chaturbhuj had only a wife and daughters and Champsi had just become a major. Moolji, Purshottam and Kalyanji had commenced a partnership business in tobacco and bidis in 1912. In 1919 Mulji made gifts of capital out of his business to each of his sons by first wife, namely, Kanji and Sewdas. Since 1919 Moolji, Kanji and Sewdas were separate from each other. On 1st May, 1919, a partnership was formed between Kanji, the son of Moolji, Chaturbhuj, the brother of Kalyanji along with Moolji and Purshottam. In 1930 Sewdas and Kalyanji's brother, Champsi, were taken into the firm by a deed dated 11th September 1930. The interest which Kanji and Sewdas thus had in the firm was a gift from their father, Moolji, and the interest which Chaturbhuj, the son of Vithaldas, had in the firm was a gift from his brother, Kalyanji. It was common ground that the original business of Moolji and Purshottam and of Kalyanji was not stated by employing any ancestral funds for the purpose and it was also not proved that any of the individual partners in the firm had thrown his interest in the firm or his receipts therefrom into the common stock, that is to say, treated it as a joint family property.
15. Upon these facts two questions arose before the Privy Council. Firstly, whether the family of the assessee in that case it stood in the assessment year 1931-32 was a Hindu undivided family within the meaning of the Income-tax Act and, secondly, if the former question was answered in the affirmative, whether, in the circumstances, the income in question should be treated as income of that family and assessed as such. In deciding these two questions the Privy Council divided the cases into three groups. Firstly, a group consisting of Moolji, Purshottam and Kalyanji, who were the original partners in the firm. They held that, though each of them was a member of a Hindu undivided family, the income from the firm in their hands was clearly the separate and self-acquired property of each partner. As the income from the firm had not been thrown into the common stock it could not be regarded as the income of the family and it remained the income of the individuals concerned. They therefore answered the first question in the affirmative and the second question in the negative. The second group was that constituted by Chaturbhuj, the son of Vithaldas. In his case, as we have said, his interest in the firm was obtained by way of gift from his brother, Kalyanji, and he had no son. The Privy Council held that his income from the firm was self-acquired and not ancestral property. Chaturbhuj also had no son but even if he had, their Lordships held that the son would have taken by birth no interest in the income from the firm. Therefore, they answered the second question in the negative and held that the first question did not arise in his case. They, however, observed that in none of the cases of these four persons did the fact that the man had a wife and daughter (on more than one) affect the result. The existence of a son did not make his father's self-acquired property family property or joint property and they observed 'that the existence of a wife or daughter does so is untenable'.
16. So far as the cases of Kanji and Sewdas, the sons of Moolji, were concerned, the Privy Council pointed out that they had obtained their shares in the partnership by gift from their father, Moolji. Neither of them had a son. It was at that time a moot question whether the property thus obtained by way of gift would be joint family property in their hands or their self-acquired property, but their Lordship were prepared to assume in favour of each assessee that it was joint family property in his hands, Having so held the Privy Council came to the conclusion that, although it may be said to be ancestral property in their hands in the sense that if either of them had a son he would take an interest in that property by birth, so long as no son was born the income from that property must be held to be the individual income of Kanji and Sewdas. At page 94 they held :
'Without deciding the question which was left open in Lal Ram Singh v. Deputy Commissioner, their Lordship, for the purposes of the present case, will assume that their interest was ancestral property, so that, if either had a son, the son would have taken an interest therein by birth. But no son having been born, no such interest has arisen to qualify or diminish the interest given by Moolji to Kanji and to Sewdas. Does then the existence of a wife, or of a wife and a daughter, make it income of a Hindu undivided family rather than income of the individual partner Their Lordships think not. A man's wife and daughter are entitled to be maintained by him out of his separate property as well as out of property in which he has a coparcenery interest, but the mere existence of a wife or daughter does not make ancestral property joint. 'Interest' is a word of wide and vague significance, and no doubt it might be used of a wife's or daughter's right to be maintained, which right accrues in the daughter's case on birth; but if the father's obligations are increased, his ownership is not divested, divided or impaired by marriage or birth of a daughter. This is equally true of ancestral property belonging to himself alone as of self-acquired property.'
17. In the passage which we have just quoted the Privy Council assumed in favour of the assessee that the property in the hands of Kanji and Sewdas was ancestral property, but even so, they said that it was ancestral only in the sense that if a son were to be born to either of them, the son would take an interest in that property, but no son being born no such interest had arisen to qualify or diminish the interest given by their father to them. Therefore, it would be their individual property until a son was born and the mere fact that each had a wife or a daughter would not make any difference. The wife or daughter had only a right of maintenance and therefore only an interest in the property in the property thereby increasing the assessee's obligations, but divesting, dividing or impairing in any way his ownership of that property and this is equally true of ancestral property as of self-acquired property. Further, their Lordships distinguished between the corpus of the property and the income from it and they pointed out that they were considering not simply a case governed by the general Hindu law but were considering a case under the Indian Income-tax Act and the expression used in that Act 'the total income of the previous year of any individual, Hindu undivided family, company, unregistered firm or other association of individuals not being a registered firm'. They further pointed out that the words of the Act were 'income of' and these were plain words, though capable of a wider and a narrower connotation. Reading them in the light of the provisions of the Income-tax Act, they held that it carried the ordinary meaning which it carried in Hindu law according to the Benaras school by which they were governed. These reasons their Lordships stated at page 95 in the following words
'The phrase which has to be considered and applied to the facts is 'the total income of the previous year of any individual, Hindu undivided family, company, unregistered firm or other association of individuals not being a registered firm'. The words 'income of' are simple words and are capable of wider on narrower meaning; but for the present purpose the courts are concerned with them as they appear in an Income-tax Act; and under section 3 or section 55 income is not to be attributed to and one of the five classes of persons mentioned in any loose or extended interpretation of the words, but only where the application of the words is warranted by their ordinary legal meaning. The relevant meaning in the present case is the ordinary meaning in Hindu law according to the Benaras school. In an extra legal sense, and even for some purposes of legal theory, ancestral property may perhaps be described, and usefully described, as family property; but it does not follow that in the eye of the Hindu law it belongs, save in certain circumstances, to the family as distinct from the individual. By reason of its origin a man's property may be liable to be divested wholly or in part on the happening of a particular event, or may be answerable for particular obligations, or may pass at his death in a particular way; but if, in spite of all such facts, his personal law regards him as the owner, the property as his property and the income therefrom is his income, it is chargeable to income-tax as his, i.e., as the income of an individual. In their Lordships' view it would not be in consonance with ordinary notions or with a correct interpretation of the law of the Mitakshara, to hold that property which a man has obtained from his father belongs to a Hindu undivided family by reason of having a wife and daughters.'
18. Thus, from this pronouncement of the Privy Council, the following propositions would flow. First, that, although the property in the hands of a Hindu male who has no son may be ancestral property, if no son is born no interest can arise to qualify or diminish the interest of such person in the income of that property and the income individual income. The reason is that having regard to the provisions of the Income-tax Act it is still his income although the property from which it comes into his hands is ancestral. The existence of a wife or daughter makes no difference because they have only an 'interest' in the property in so far as they are entitled to maintenance therefrom but they do not in any way affect the ownership of that property.
19. What then is the position which arises in the present case. No doubt the assessee who held Kathoke Lodge as his self-acquired property has declared his intention to throw it into the family hotchpot and has said that from the date of the declaration he will hold the property as the karta of his Hindu joint family. He has also declared however that his Hindu joint family consists of himself, his wife and one child which in the this case is his daughter. He has also declared that the family hotchpot for the case is his daughter. He has also declared that the family hotchpot for the time being shall consist of only this property and none other. No doubt it has been urged that a Hindu undivided family may consist of a male member, his wife and his unmarried daughter and that, if so, this property after the declaration would be joint family property in the hands of the assessee. On this question itself however there was acute contest by counsel on behalf of the department, but we will assume, as was assumed in the Privy Council case, for the sake of applying the principle of that case, that this was a joint family property in the hands of the assessee, but as in the Privy Council case the assessee has no son, and he holds the property therefor only subject to this that if a son is born an interest will arise in his favour to qualify or diminish the interest which he had in the property. It would still be property of which he individually would be the owner. But for the purposes of the Income-tax Act we are not so much concerned with the nature and quality of the corpus from which that income arises, but with the nature and quality of the income itself and looking at it from that point of view - and that in short is the principle which has been established by Kalyanji's case - it is difficult to see what difference has been made in the nature and quality of the interest which the assessee has in the income after the declaration as compared with his interest prior to the declaration.
20. We would for purpose of discussing the question accept the contention on behalf of the assessee that there is no warrant for the contention of the department that there must be at least two male members to form a Hindu undivided family as a taxable unit. We will also accept the position that the expression 'Hindu undivided family' in the Income-tax Act is used in the sense in which a Hindu joint family is understood in the personal laws of the Hindus, as well as the submission on behalf of the assessee that a joint family may consist of a single male member, his wife and daughter. Therefore, after the declaration, the property, as counsel submitted, would be property of a Hindu undivided family in the hands of the assessee. But the assessee has no son and therefore no undivided family. His ownership of the property and its income in fact remains the same as before. The fact of the existence of a wife or of a wife and daughter would make no difference to his ownership of that property. The assessee is the sole male member of the family and his right to that property and its income remains exactly the same as it was when he received that income from Kathoke Lodge as his separate property. His position as a member of the joint family after the declaration would be the same as that of a sole serving coparcener, but it is now settled law that a person who for the time being is the sole surviving coparcener is entitled to dispose of the coparcenery property as if were his separate property. He may sell or mortgage the property without legal necessity or he may make a gift of it. It a son is subsequently born to him adopted by him, the alienation, whether it is by way of sale, mortgage or gift, will nevertheless stand, for a son cannot object to alienations made by his father before he was born or begotten. That is the position which the assessee held so far as this property is concerned. So far the income is concerned, he has the complete power of disposal over the income and even assuming that he is the karta of a joint Hindu family, there is no one who can question his spending, i.e., whether or not it is for legal necessity or other justifiable purpose. If then, his right to the income remains under his personal law the same as it was before he made the declaration, the question arises whether under the Income-tax Act it must be held to be the income of the karta of the Hindu undivided family. That is precisely the question which the Privy Council answered against the assessee in Kalyanji's case, by saying that by reason of its origin a man's property may be liable to be divested wholly or in part on the happening of a particular event, or may be answerable for particular obligations, or may pass at his death in a particular way; but in spite of all such facts, his personal law regards him as the owner, the property as his property and the income therefrom as his income, it is chargeable to income-tax as the income of an individual. In our opinion, therefore, the assessee's case would fall squarely within the principle enunciated by their Lordships of the Privy Council in Kalyanji's case and upon that view the income in the hands of the assessee would be liable to be assessed as his individual income.
21. But it has been said that Kalyanji's case has been doubted in several decisions and ought not to be taken as the law today.
22. The first of these decisions is the decision of the Supreme Court in Civil Appeals Nos. 1477 and 1478 of 1968 N. V. Narendranath v. Commissioner of Wealth-tax, decisions on 7th March, 1969. This was an appeal by special leave from the decision of the Andhra Pradesh High Court in Commissioner of Wealth-tax v. N. V. Narendranath's. In Narendranath's case the assessee, his father and brothers admittedly formed a joint Hindu family at one time but they had effected a partition between themselves. They also owned an impartible estate known as 'Munogala Estate'. Consequent upon the abolition of estate in Madras compensation for this estate was paid severally to the assessee, his father and his brothers. Prior to this the other properties of the joint family had been partitioned. The question arose with reference to all these assets (including the amount of compensation) whether the assessee should be assessed to wealth-tax in the status of Hindu undivided family or as individual. The assessee's family at the material time consisted of himself, his wife and his two minor daughters and there were no other male members. The High Court held, differing from the Tribunal, that, since the assessee's family in that case did not have any other male coparcener, all the assets forming the subject-matter of the returns filed by the assessee belonged to him as an individual, and not to a Hindu undivided family. When the matter came by way of appeal by special leave to the Supreme Court, the Supreme Court referred to Kalyanji's case at length and accepted the statement of the law in Kalyanji's case, in so far as it decided that there was no warrant for the contention that there must be at least two male members to from a Hindu undivided family as a taxable unit. The expression 'Hindu undivided family' they also held, agreeing with Kalyanji's case, was used in the sense in which a Hindu joint family was understood in the personal law of the Hindus and they categorically laid down that 'under the Hindu system of law a joint family may consist of a single male member and his wife and daughters'. Since they were dealing with a case under the Wealth-tax Act they observed that there was nothing in the scheme of the Wealth-tax Act to suggest that a Hindu undivided family as an assessable unit must consist of at least two male members.
23. Having so far accepted the principles laid down in Kayanji's case the Supreme Court pointed out the difference that existed between Kalyanji's case and other cases. They distinguished between two classes of cases : firstly, the case where property not originally join is received by the assessee and the question has to be asked whether it has acquired the character of a joint family property in the hands of the assessee and, secondly, where the property already impressed with the character of a joint family property comes into the hands of the assessee as a single coparcener and the question required to considered is whether it has retained the character of joint family property in the hands of the assessee or is converted into absolute property of the assessee. According to the Supreme Court Kalyanji's case belonged to the former category. They then analysed the facts of Kalyanji's case. We have already set them forth and they need not be repeated. They pointed out that there was a distinction between the cases of Moolji, Purshottam and Kalyanji on the one hand, of Chaturbhuj on the other hand, and of Kalyanji and Sewdas, the sons of Moolji on the third hand. Then they stressed that though Kalyanji and Sewdas had received the property from their father :
'the Judicial Committee held that (in that case) though the income was from an ancestral source, the fact that each partner had a wife or daughter did not make that income from ancestral source income of the Hindu undivided family of the partner, his wife and daughter'. We have ourselves quoted the particular passage from the decision in Kalyanji's case.
24. Having pointed out this special feature of the decision in Kalyanji's case the Supreme Court distinguished that case from other cases in the following language :
'Different considerations would be applicable, where property already impressed with the character of joint family property comes into hands of a single coparcener. The question to be asked in such a case is whether the property retains the character of joint family property or whether it sheds the character of joint family property and becomes the absolute property of the single coparcener.'
25. Thus, the Supreme Court distinguished the case before them from Kalyanji's case, but it was urged on behalf of the assessee that Kalyanji's case has been criticised by the Supreme Court in another aspect. The Privy Council in Kalyanji's case referred to the decision of this court in Commissioner of Income-tax v. Gomedalli Lakshminarayan and in Kalyanji's case with reference to Gomedalli's case (they have referred to it as Lakshminarayan's case), they have observed :
'the Bombay High Court, on the other hand, in Lakshminarayan's case having held that the assessee, his wife and mother were a Hindu undivided family, arrived too readily at the conclusion that the income was the income of the family.'
26. In Narendranath's case the Supreme Court pointed out that this remark of the Privy Council in Gomedalli's case was not correct in view of the distinction which they had pointed out in Narendranath's case as to the source of the property. They pointed out the error in the following passage;
'In Commissioner of Income-tax v. Gomedalli Lakshminarayan the property was ancestral in the hands of the father and the son had acquired an interest in it by birth. There was a subsisting Hindu undivided family during the lifetime of the father and that family did not come to an end on his death. On these facts, the Bombay High Court held that the income received from the property was liable to super-tax as the income of the Hindu undivided family in the hands of the son who was the sole surviving male member of the Hindu undivided family in the year of assessment. The reasoning was that the property from which income accrued originally belonged to a Hindu undivided family and on the death of the father it did not cease to be property of that Hindu undivided family but continued to belong to that Hindu undivided family and its income in the hands of the son was, therefore, assessable as income of the Hindu undivided family. There was a vital distinction between the facts of this case and the facts in Kalyanji's case. This distinction was not noticed by the Judicial Committee in Kalyanji's case when it observed that the Bombay High Court 'arrived to readily at the conclusion that the income was the income of the family'. When Gomedalli's case was carried in appeal the Judicial Committee once again failed to notice the distinction and wrongly reversed the decision of the Bombay High Court holding that the facts of the case were not materially different from the facts in Kalyanji's Case. (See the decision of the Judicial Committee in Commissioner of Income-tax v. A. P. Swamy Gomedalli).'
27. This passage is relied on by counsel to suggest that Kalyanji's case is no longer good law. We cannot accept that argument. What the Supreme Court pointed out in the passage we have quoted was simply that the Privy Council's appreciation of facts in Kalyanji's case was not correct, as shown by their remarks in Kalyanji's case was wrongly decided. All the Supreme Court said was that in Gomedalli's case the property was ancestral in the hands of the father and the son had acquired an interest in it by birth and so when the Privy Council remarked that the Bombay High Court arrived 'too ready at the conclusion that the income was income of the family' the remark was incorrect. They did not say that Kalyanji's case was wrongly decided.
28. In short, therefore, Narendranath's case accepts the decision in Kalyanji's case and establishes finally the distinction between Kalyanji's case and other cases which have subsequently arisen. In Kalyanji's case the property which came to the hands of Kanji and Sewdas was held not to be impressed with the character of joint family property. The reason which prevailed with the Privy Council was that neither of them had a son pro tanto and therefore it was no better than property held by these person in their individual capacity. The other class of cases are the cases where the property which being already impressed with the character of joint family property comes into the hands of the assessee as a single coparcener and with reference to that class of cases the Supreme Court held that it would not cease to be property of a Hindu undivided family.
29. The decision in Narendranath's case, therefore, does not show that Kalyanji's case was upon the point with which we are concerned held to be incorrectly decided, or in any manner thrown in doubt. On the other hand, Narendranath's case, so far as the point before us is concerned, accept the decision in Kalyanji's case but distinguishes that case from the other cases where the property is at sources a joint family property. The decision in Narendranath's case at no stage has held so far as the point before us is concerned that Kalyanji's case was incorrectly decided.
30. In Gowli Buddanna v. Commissioner of Income-tax the Supreme Court took the same view which they have subsequently reiterated in Narendranath's case (Civil Appeals Nos. 1477 and 1478 of 1968). In that case the family originally consisted of A, his wife and his two unmarried daughters and B, an adopted son. A died leaving behind the adopted son, his widowed mother and his two unmarried daughters. The property was originally joint family property and it was held that, although the adopted son was the sole surviving male member of the family, the property of the joint family did not cease to belong to the family merely because the family was represented after A's death by a single coparcener, namely, the adopted son, B, who possessed rights which an owner of property might possess and the income received therefrom was taxable as income of the Hindu undivided family. The difference once again between this case and the decision in Kalyanji's case as regards the two sons of Moolji, Kanji and Sewdas are concerned, was the same, namely, that in Gowli Buddanna's case the property originally was joint family property and would not lose its character because the family was narrowed down to a single male member with his widowed mother and sisters, whereas in the case of Kanji and Sewdas it was held to be property held by them in their individual capacity because it was never the property of a joint family. The same criticism of the remarks in Kalyanji's case' with reference to Gomedalli's case was made by the Supreme Court in Gowli Buddanna's case namely, that the Privy Council overlooked the fact that in Gomedalli's case, the joint family property was at source (vide page 300). Here again, therefore, the decision in Kalyanji's case was not dissented from doubted but, on the other hand, accepted and the case distinguished from Gowli Buddanna's case and Gomedalli's case.
31. Kalyanji's case was further referred to in a decision of the Gujarat High Court in Commissioner of Wealth-tax v. Dahyabhai Chimanlal Sheth. In the Gujarat case, A, his wife B, his son, C, and A's two unmarried daughter constituted a Hindu undivided family. A died and thereafter B also died, leaving C and his 2 unmarried sisters as the sole surviving members of the family. The department contended that, as C was the sole coparcener, the property which originally belonged to the family should be assessed to wealth-tax as the property of C as an individual. The Gujarat High Court referred to Kalyanji's case at page 7 and distinguished it from the case before them on the same ground that the Supreme Court distinguished it subsequently in Civil Appeals Nos. 1477 and 1478 of 1968 and having discussed the cases they posed the question before them by saying 'The question is, in which class of cases does the present case fall; does it fall within the class of cases represented by Kalyanji's case or does it fall within the class of cases represented by Gomedalli's case Arunachalam's case and Gowli Buddanna's case. They held that the case before them fell within the latter class of cases. Kalyanji's case was similarly followed in K. R. Ramachandra Rao v. Commissioner of Wealth-tax, Madras by the Madras High Court. In Ramachandra Rao's case the assessee was the sole surviving coparcener of a Hindu undivided family and it was held that he did not constitute a Hindu undivided family for purposes of assessment to wealth-tax. They referred to Kalyanji's case at page 963 and while they did not advert to the special feature in Kalyanji's case which, according to the Supreme Court, in Narendranth's case distinguished it from the other cases, they merely followed it. At any rate, the decision does not throw any doubt on Kalyanji's Case.
32. The one case in which Kalyanji's case was not followed is the decision of the Patna High Court in Panna Lal Rastogi v. Commissioner of Income-tax where it was held that the sole surviving male coparcener of a Hindu undivided family must be assessed in respect of his ancestral property in the status of a 'Hindu undivided family' and not as an 'individual'. The Patna High Court observed that in such a case the test to be applied for determining the status of the assessee is not whether he has an alienable right in respect of such property but whether there is a potentiality of a coparcener being brought into existence either by law or by nature, that is to say, either by adoption or birth of a son. At page 595 the learned Chief Justice, who delivered the judgment on behalf of the Division Bench, remarked with reference to Kalyanji's case and the decision or the Madras High Court in Ramachandra Rao's case : 'With great respect, I am unable to follow these decisions, because they have not taken into consideration the subsequent decisions of the Privy Council, especially the Ceylon case mentioned above. On the other hand, there is a judgment of the Mysore High Court in Commissioner of Wealth-tax v. Lt. Col. D. C. Basappa taking a contrary view, where the decision of the Privy Council in the Ceylon case was relied on'. In view of the decision of the Supreme Court in Civil Appeals Nos. 1477 and 1478 of 1968, we do not think that the Patna case was correctly decided. With respect we would observe that the distinction drawn in Narendranath's case as to the source from which the property came was not drawn and, so far as the sole surviving male coparcener is concerned, the decision of the Madras High Court was to the contrary. For the same reasons we are unable to accept the view expressed in the Mysore case in Commissioner of Wealth-tax v. Lt. Col. D. C. Basappa.
33. Upon these authorities it is clear that the decision in Kalyanji's case, has not been dissented from by the Supreme Court nor doubted upon any principle enunciated therein either by the Supreme Court or any other High Court. Kalyanji's case and the present case are distinguishable from all these cases because in all these cases the property when came into the hands of the assessee was originally joint family property and received by the assessee as such. That is the decision which the Supreme Court also adverted to in their decision in Narendranath's case and, so far as the question before us is concerned, it is not necessary for us to go further than that. We have already indicated that, even if we were to assume as was assumed in Kalyanji's case that it was a joint family property in the assessee's hands after his declaration, the income would still be his individual income, though upon the distinction which the Supreme Court has drawn as to the source of the property, it must be emphasised that it was admittedly the self-acquired property of the assessee before the declaration was made and could not have changed its character by it. Since he had no son and until a son was born to him the income from that property is exclusively his. Both in the matter of ownership and control it must be held that it was his individual income.
34. Great reliance was placed on the decision of the Privy Council in Attorney-General of Ceylon v. Arunachalam Chettiar on behalf of the assessee. That case was decided along with  34 I. T. R. 20, a connected appeal where the facts are stated in detail. A father and son were the only living coparceners of a Hindu joint family governed by the Mitakshara. The son died on 9th July, 1934, and the father became the sole surviving coparcener of the Hindu undivided family to which also belonged a number of females. No other coparcener came into existence during the father's life time but a power of adoption existed in his deceased son's window. During the father's lifetime the Estate Duty Ordinance of 1938 came into force. The father died on 23rd February, 1938, leaving behind his own and his son's widow both capable of adopting sons. The power of adoption was in faceted exercised by both the widows. Section 73 of the Ordinance exempted the joint property of a Hindu undivided family in a case 'where a member of a Hindu undivided family dies' and the question was whether the father, the sole surviving coparcener after the son's death, was 'a member of a Hindu undivided family'. The Privy Council held that the father was at his death a member of a Hindu undivided family - the same undivided family of which his son, when alive, was a member and the continuity of which was later ensured by the adoptions made by the widows.
35. It was urged on behalf of the assessee that Arunachalam's case shows that a sole male member can form a joint Hindu family with only female members; therefore the assessee must be held to form a joint Hindu family with his wife and daughter after the declaration.
36. No doubt the Privy Council did hold in Arunchalam's case that the temporary reduction of the coparcenary unit to a single individual did not convert what was previously joint property of the undivided family into the separate property of the surviving coparcener, but when the Privy Council said that, they said it with reference to proper which was already joint family property when it came into the hands of the sole surviving coparcener, the father. It was property - to use the expression used by the Supreme Court in Narendranath's case - 'already impressed with the character of joint family property'. That is not the case here. In the present case, the property was admittedly the self-acquired property of the assessee before his declaration, and even assuming that he held it in the capacity of a sole surviving coparcener after the declaration, it was never joint family property in its origin and therefore could not partake of the character of joint family property in his hands - simply because two female members entitled only to maintenance were there with him to constitute a family. The present case clearly would not fall within the principle of Arunachalam's case but would equally clearly fall within the principle of Kalyanji's case.
37. In the view which we take it is unnecessary to go into the further question raised by Mr. Joshi on behalf of the department based on a remark of the Supreme Court dealing with the doctrine of blending in Mallesappa v. Mallappa at page 1272, column 1, that, 'the basis of the doctrine is the existence of coparcenary and coparcenary property. . .' or the question raised in reply to that argument whether the doctrine of blending at all applies to the facts here.
38. We agree with the view taken by the Tribunal, though for somewhat different reasons. We answer the question raised in the negative. The assessee shall pay the costs of the Commissioner.