V.S. Desai, J.
1. This is a reference under section 66(1) of the Indian Income-tax Act, at the instance of the assessee, and relates to his assessments for the assessment years 1955-56, 1956-57 and 1957-58. The question raised on the reference is :
'Whether there is evidence to justify the finding that the income from the two properties and the deposits belonged only to the assessee in his individual capacity and not to the Hindu undivided family of which he was a member, so as to make the income therefrom taxable in his hands ?'
2. The properties in respect of which the question is raised are plot No. 45, Delisle Road, together with the building constructed thereon, and another property, plot No. 4. The deposits are four deposits, totalling to Rs. 1,37,000 which had been made by the assessee with four persons. The father, who was the karta of the Hindu undivided family, was carrying on milk business and also owned some property. The assessee during the lifetime of his father had acquired property, plot No. 45, Delisle Road, in his own name, and had also constructed a building thereon. The assessee had both business income and property income during the lifetime of his father, and was being assessed to tax in the capacity of an individual. In April, 1944, the assessee's father died and the assessee became the karta of the joint family, which consisted of himself, his wife and his four sons. On 18th September, 1944, the assessee purchased plot No. 4 for a total consideration of Rs. 3,52,250. A part of the money paid for this purchase was not out of the funds belonging to the assessee which the assessee had with him. He raised Rs. 60,000 on the mortgage of his other property, plot No. 45, and Rs. 2,25,000 on the mortgage of the property purchased. He also raised Rs. 45,000 partly by a sale of an item of joint family property for Rs. 17,000 and by mortgaging another item of the joint family property for Rs. 28,000. From 1944, up to and inclusive of the assessment year 1954-55, the assessee filed his income-tax returns in the status of an individual and included in the returns all income which he received from the admittedly joint family properties, and also from the properties, plot No. 45 and plot No. 4, as his individual income. In January, 1954, a part of plot No. 1 which was admittedly the property belonging to the joint family was acquired by the Bombay Municipal Corporation and a compensation of Rs. 4,28,000 was paid for the said acquisition. The assessee deposited the amount of compensation which he received from the Municipal Corporation in the United Commercial Bank. During the year 1954, the assessee satisfied the mortgages on plot No. 45 and plot No. 4, which he had created on the said properties on the 18th September, 1944, for raising funds for the purchase of plot No. 4. In the assessment for the years 1955-56, 1956-57 and 1957-58, the assessee contended that the assessments should be made not in the status of an individual, but in the status of a Hindu undivided family in respect of the entire income. The income-tax authorities held that the status claimed could not be accepted in respect of the entire income inasmuch as a part of the income belonged not to the Hindu undivided family but to the assessee as an individual. The items of income which were regarded as belonging to the assessee as individual included the income from the two properties, plot No. 45 and plot No. 4, and also income from the four deposit totalling Rs. 1,37,000. It was the assessee's contention that the income of the said properties and deposits also belonged to the Hindu undivided family and not to himself as an individual, and it is on that contention that the question raised on reference is framed.
3. With regard to property, plot No. 45, which was purchased in the assessee's own name during the lifetime of his father, when the assessee was carrying on his own business and was possessed of his separate income, no contention whatever could be urged that the said property belonged not to the assessee separately but to the joint Hindu family. The said property, as pointed out by the Tribunal, had not only been purchased in the name of the assessee but had stood in his name all along, and there was nothing to show that the assessee was a benamidar of his father in respect of the said property.
4. As to the other property, namely, plot No. 4, it was purchased on the 18th September, 1944, when the assessee's father had died and the assessee had become the karta of the joint Hindu family. The assessee's contention is that the purchase of this property was purchase of the joint family, because a sum of Rs. 45,000 out of the consideration paid for this purchase was raised party by sale and partly by mortgage of the joint family properties. The joint family properties, therefore, having been utilised for the purchase of this property in part, the property must take the character of the joint family property. This contention of the assessee has not been accepted by the Tribunal and, in our opinion, the Tribunal is right in doing so. The property was purchased for a sum of Rs. 3,52,250 and the sum raised on the joint family properties which was utilised towards this purchase was only to the extent of Rs. 45,000. The purchase therefore could not be said to have been made from funds belonging to or from the nucleus of the joint family. Moreover, it must be remembered that the assessee had a share in the family properties which were sold or mortgaged for raising the amount of Rs. 45,000 and his act in entering into this transaction could not necessarily said to be act of raising funds on behalf of the joint family for purchase for the joint family. The contention of the assessee, therefore, that the purchase of this property, plot No. 4, on the 18th September, 1944, was a purchase by or on behalf of the joint Hindu family cannot be accepted. The assessee's alternative contention was that at any rate in 1954 when the compensation amount received for the acquisition of the property belonging to the joint family was utilised in paying off encumbrances on plot No. 4 and plot No. 45, which were created for raising funds for the purchase of plot No. 4, a major portion of the price paid for the property could be said to have come out of the joint family funds and the joint family therefore must be held entitled to the property. It is difficult to accept this contention. If a member of the Hindu undivided family takes money from the Hindu joint family or utilises the funds of the Hindu joint family which are in his hands as a karta or manager thereof for paying off the encumbrances on his self-acquired property, the said act or conduct on his part could not have the effect, in law, of transferring the title to the property from the individual member to the joint Hindu family. The property in 1944 when it was purchased was the property of the individual member, viz., the assessee. Utilization of the family funds in 1954 in paying off the mortgage on the property cannot have the effect of transferring title of those property from the assessee to the joint family. The third contention in this connection on behalf of the assessee was that the conduct of the assessee in utilizing the family for paying off the encumbrances is indicative of his having entertained the intention right from the time of the purchase of the property to treat the property as belonging to the joint family or, at any rate, indicative of his intention a abandon all separate rights to the property and blend it with the joint family property from 1954 onwards. Now, whether the assessee, when he purchased the property in 1944, intended the purchase to be on behalf of the joint family, must be considered with regard to the circumstances prevailing at that family. Now those circumstances as pointed out by the Tribunal are indicative not of an intention to treat the property as joint family property, but of a contrary intention. If the purchase was intended to be on behalf of the joint family property, the funds of the joint family could have been used or, if the funds were necessary to be raised, they could have been raised on the joint family property. The funds, however, were not raised on the joint family property, but were raised mainly on the properties belonging to the assessee himself, viz., plot No. 45 and plot No. 4, which was being purchased. The utilization of the funds of the joint family for the payment of the encumbrances in 1954 could not have any bearing on the intention entertained in the year 1944 which, as pointed out above, appears to be to make the purchase of the assessee himself. The said utilization of the family funds for paying off the encumbrances cannot also suffice to indicate an intention on the part of the assessee to blend the joint family property. It is no doubt true that a member of the Hindu undivided family can throw property which belongs to himself separately into the common stock and blend it with the joint family properties. But, in order that such blending should take place, there must be a clear intention on the part of the person to abandon all his individual rights in respect of that property and make it the property of the joint family, and no longer a separate property of himself. There is no evidence on the record of the case, which shows any such intention on the part of the assessee. As has been pointed out by the Appellate Assistant Commissioner, the property continued to stand in the name of to assessee alone as before and no mutation has been made in favour of the other members of the joint family in the municipal records or anywhere at any time, nor has there any dead executed or any act done by the assessee to show that the property which belonged to him has been transferred by him to the Hindu undivided family by surrendering his exclusive right, title and interest therein. Mere utilization of the joint family funds for the purposes of paying off these encumbrances in the absence of anything more would merely make the assessee accountable to the joint family in respect of the amounts so utilized, but will not have the effect of making the property belong to the joint family. In our opinion, therefore, the Tribunal was right in its decision so far as the income of the properties was concerned.
5. As to the income from the four deposits also, the decision of the Tribunal is, in our opinion, right. The only argument advanced by the assessee for treating the said income as belonging to the joint family is that the compensation money which was received by the assessee belonged to the Hindu undivided family and the deposits should be treated as having been made out of those funds. There was, however, no evidence co-relating the deposits with the said amount of compensation and, inasmuch as the assessee was possessed of sufficient funds belonging to himself out of which the deposits could have been made, the Tribunal was justified in holding that the deposits could not be treated as made out of the joint family funds.
6. The answer, therefore, to the question referred to us is in the affirmative. The assessee will pay the costs of the department.
7. Question answered in the affirmative.