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Commissioner of Income-tax, Mysore Vs. Purushotam Gangadhar Bhende - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtMumbai High Court
Decided On
Case NumberIncome-tax Reference No. 87 of 1972
Judge
Reported in[1977]106ITR932(Bom)
ActsIncome Tax Act, 1961 - Sections 2(31), 14, 22, 23, 24, 25, 25A, 25A(1), 26, 27 and 41; Portuguese Civil Code; Commercial Code - Article 10
AppellantCommissioner of Income-tax, Mysore
RespondentPurushotam Gangadhar Bhende
Appellant AdvocateR.J. Joshi, Adv.
Respondent AdvocateS.P. Mehta, Adv.
Excerpt:
direct taxation - status - income tax act, 1961, article 10 of commercial code and portuguese civil code - matter pertains to assessment of income from house property possessed by communion of interest of husband and wife married under portuguese civil code - as per portuguese civil code read with article 10 husband and wife married according to customs of goa will have definite and ascertainable share in corpus as well as in income - restrictions found in portuguese civil code on enjoyment of property do not contravene any requirement of section 26 - section 26 applied - held, income assessable in equal shares in hand of 'body of individuals' of communion of husband and wife. - - section 2(31) defines the term 'person' as including, inter alia, an individual as well as an.....vimadalal, j. 1. the assessee is a citizen of goa, governed by the portuguese civil code. he was married as per the custom of goa, and under the relevant provisions of the portuguese civil code, a house property which yielded an income of rs. 3,810 during the assessment year 1968-69, with which the court is concerned in the present reference, thereupon became the property of the communion of the husband and wife. it will hereafter be referred to as 'communion property'. the income-tax officer determined the status as 'body of individuals' of husband and wife and taxed the income from the house property accordingly. that decision was reversed by the appellate assistant commissioner who held that the respective shares of the husband and wife must be taxed in their individual hands.....
Judgment:

Vimadalal, J.

1. The assessee is a citizen of Goa, governed by the Portuguese Civil Code. He was married as per the custom of Goa, and under the relevant provisions of the Portuguese Civil Code, a house property which yielded an income of Rs. 3,810 during the assessment year 1968-69, with which the court is concerned in the present reference, thereupon became the property of the communion of the husband and wife. It will hereafter be referred to as 'communion property'. The Income-tax Officer determined the status as 'body of individuals' of husband and wife and taxed the income from the house property accordingly. That decision was reversed by the Appellate Assistant Commissioner who held that the respective shares of the husband and wife must be taxed in their individual hands separately under section 26 of the Income-tax Act, 1961. On appeal to the Tribunal, on a consideration of the relevant provisions of the Portuguese Civil Code, it has held that each of the consorts had a vested interest in his or her half share, and by its order dated 13th December, 1970, the Tribunal, therefore, confirmed the Appellate Assistant Commissioner's view that the income from the house property was liable to assessment in equal shares in the hands of each of the consorts separately and dismissed the appeal. On this reference, the following question has been referred to the High Court under section 256(1) of the Income-tax Act, 1961 :

'Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the income from the house property possessed by the communion of interest of husband and wife married under the Portuguese Civil Code was liable for assessment in equal shares in the hands of the 'body of individuals' of communion of husband and wife for the relevant assessment year ?'

2. When the matter first came up before us, parties were not agreed in regard to the proper translation of the relevant provisions of the Portuguese Civil Code. It was, therefore, adjourned for obtaining an official translation from Goa. When it came up before us again on 10th December, 1974, an official transaction was produced, and was tendered and marked by us as exhibit 'A'. That was supplemented by an agreed translation of certain other provisions of the Portuguese Civil Code on which also the parties sought to rely, and the same was tendered and marked exhibit 'B' by us.

3. I must, at the outset, refer to the relevant provisions of the Income-tax Act, 1961, with which we are concerned in this reference. Section 2(31) defines the term 'person' as including, inter alia, an individual as well as an association of persons or a body of individuals, whether incorporated or not. Section 14 enacts that all income must be classified for the purpose of charge of income-tax and computation of total income under the six heads of income set out therein, one of which is 'income from house property'. The Act then proceeds to enact appropriate provisions for the computation of the total income relating to each of the heads listed in section 14, and sections 22 to 27 deal with the head of income from house property. Section 26 which occurs in that group of sections is important for the purpose of the present case and must be set out verbatim. It reads as follows :

'Where property consisting of buildings or buildings and lands appurtenant thereto is owned by two or more persons and their respective shares are definite and ascertainable, such persons shall not in respect of such property be assessed as an association of persons, but the share of each such person in the income from the property as computed in accordance with sections 22 to 25 shall be included in his total income.'

4. It may be mentioned that section 26 of the Income-tax Act, 1961, reproduces what was section 9(3) of the Indian Income-tax Act, 1922, which was introduced into that Act some time in the year 1939. In connection with the language employed by the legislature in section 26, it must be noted that whilst the word 'definite' used therein has a connotation in praesenti, the word 'ascertainable' has a connotation in futuro, the legislature having advisedly not used the word 'ascertained'. In the Oxford English Dictionary, volume III, several meanings of the word 'definite' have been given, but, in my opinion, in the context in which that word is used in section 26, the meanings which are applicable are from the first meaning given in the said dictionary, and they are 'fixed, certain'. When the word 'definite' is understood in the sense of 'fixed', it means fixed as opposed to fluctuating, and when the word 'definite' is understood in the sense of 'certain', in my opinion, it means that it is certain in the sense of being not dependent on a contingency, or in the sense of not being in dispute. The case of Abdul Rahman v. Commissioner of Income-tax was a case in which the parties were Mahomedans. The brothers disputed the right of the sisters to any share in the estate left by their deceased father by reason of the customary law alleged to be applicable to them, and there was a suit pending between them. The view taken was (at page 309) that though the share of each heir could be said to be ascertainable, so long as litigations were pending, it could not be said to be definite within the ordinary meaning of that term. The term 'ascertain' is also given several meanings in volume I of the Oxford English Dictionary, but the meaning which, in my opinion, is applicable in the context in which it is used in section 26 is part of the 8th meaning given therein, viz., to make precise by determining exactly its limits, extent, amount, etc. As already pointed out above, section 26 uses the word 'ascertainable' which would, therefore, mean something capable of being made precise by determining its limits, extent or amount. The question which we have to determine in this reference, therefore, is whether in the case of a husband and wife governed by the Portuguese Civil Court and married according to the custom of Goa, each of them can be said to own shares in house property which are 'definite and ascertainable' within the above meaning of the terms as used in section 26. Mr. Joshi sought to contend that the shares of the husband and wife must be definite and ascertainable in respect of each individual house property, but I am not prepared to accept that contention of Mr. Joshi. First and foremost, it is important to bear in mind that section 26 deals with one of the heads of income in section 14 which is captioned as 'income from house property' and which must mean the total income from all the house properties owned by the assessee. Secondly, the opening words of section 26 itself show that the section deals with property 'consisting of buildings or buildings and lands appurtenant thereto owned by two or more persons', which must mean that it deals with property in a collective sense and not with a specific property. The use of the word 'property' in the latter part of the same section must, therefore, obviously be given the same meaning and must be held to have been used in a collective sense as referring to the income of all the house properties owned by the assessee. I, therefore, hold that the definite and ascertainable shares which the assessee must hold in order to come within section 26 need not be definite and ascertainable shares in each individual house property, but in all the house properties owned by him collectively, regardless of the assessee's income from the other heads of income mentioned in section 14 with which section 26 is not concerned. The second question that arises, as a matter of construction of section 26, is whether the shares of the assessee must be definite and ascertainable in the corpus of the house properties, or in the income thereof, or in both the corpus as well as the income of the house properties. A plain reading of the section, in my opinion, shows that the opening part clearly contemplates that the assessee must have definite and ascertainable shares in the corpus of the house property owned by him, and the latter part of the section, when it refers to the income from that house property, postulates that the income is also to be owned by the assessee in the same definite and ascertainable shares as the corpus. The view I take of section 26, therefore, is that in order to fall within section 26, the assessee must have definite and ascertainable shares in the corpus as well as the income of all the house properties which he owns.

5. I must next proceed to consider the relevant articles of the Portuguese Civil Code, translations of which have been tendered and marked exhibits 'A' and 'B' before us, as already stated above. Article 373 lays down that 'things' are either immovable or movable; article 375 then sets out what are 'unmovable' by virtue of law; article 376 enacts that all material things which are not immovable properties are 'movable' and clause 'one' of article 377 lays down that by the words 'movable things or movable estates' must be understood only material objects which by their nature are movable. These articles, in my opinion, show that money is not included within the term 'movables' as used in the Portuguese Civil Code.

6. Article 1096 which occurs under the heading 'general provisions' permits consorts to stipulate before the celebration of marriage and within the limits prescribed by law whatever they think proper in respect of their estate, and article 1097 provides that such agreement must be by way of a public deed. Article 1098 enacts that in the absence of any such agreement, the marriage shall be deemed to have been celebrated as per the custom of the country and article 1099 lays down that in such cases the provisions of article 1108 to 1124 would be applicable. It is an agreed position between the parties that the marriage in the present case was a marriage celebrated as per the custom of the country and articles 1108 to 1124 are applicable, as far as the husband and wife in the present case are concerned.

7. Article 1108 lays down that marriage as per the custom of the country consists in communion between the consorts, of all their estates, present and future, not excluded by law; and article 1109 enlists what is excluded from the communion. It is not necessary to deal with the same, but it is pertinent to note that in the unique para. (proviso) it is laid down that the incommunicability of the estate mentioned in article 1109 does not cover the fruits of and the income from the estate. Articles 1110 to 1116 are a group of articles dealing with debts, and amongst them, article 1113 provides that debts are communicable when acquired during the subsistence of the matrimony by the act or conduct of both the consorts, or by the husband with the consent of the wife, or by the wife with the authorisation of the husband, or by the wife alone in a case falling under article 1116 with which we are not concerned. Article 1114 provides that the personal estate of the husband is liable for repayment of debts acquired by him without the consent of the wife during the subsistence of the matrimony, and that in the absence of any personal estate of the husband, the same are to be repaid 'from his half share in the common estate', though immunity from recovery is granted in such cases till the dissolution of the marriage or separation of the estate between the consorts.

8. That brings me to article 1117 which is a very important provision for the purpose of the present case. Article 1117 enacts in unequivocal terms that 'the dominion and possession' of the common estate vest in both the consorts during the subsistence of the matrimony, though the management of the estate of the couple belongs to the husband. The same article, however, provides, that the wife may manage the estate of the couple by consent of the husband, or during his absence or his suffering from some impediment. The word 'dominion' has its derivation from the term 'dominium' which is a term of Roman law often retained in legal use and means 'lordship' or 'ownership'. The Shorter Oxford English Dictionary, 3rd edition, therefore, gives at page 551, the meaning of the word 'dominion' in law (third meaning) as being 'ownership; property; right of possession, and that is the sense in which the word 'dominion' is used in article 1117. Article 1118 empowers the husband to freely dispose of the movable properties of the couple, but in case he alienates or binds under a gratuitous contract any such property without the consent of the wife, the value of the properties so alienated is to be 'taken into account' towards the husband's half share. The use of the words 'dispose', 'alienates' and 'contracts', as well as the definition of the term 'movable things' or 'movable assets' in articles 373 to 377 referred to above, in my opinion, show that article 1118 does not apply to money and cannot, therefore, apply to the income from communion property which the husband may receive in the form of cash. What is more, article 1471 shows that where the legislature of Goa intended to refer to money, it has provided for it in distinct terms and has not included it in the term 'movables' as used therein. Similarly, article 1119, which relates to immovable properties, whether belonging exclusively to either of the consorts or belonging to them in common, provides that they cannot be alienated or any charge created thereon without common consent and agreement. Articles 1118 and 1119, therefore, in my opinion, also show that the wife has certainly an interest both in the movable as well as the immovable properties of the communion. Indeed, Mr. Joshi has not contended that communion properties belong to the husband only, but the whole dispute in this reference has been in regard to the question as to whether, during the subsistence of the communion, the share of either spouse can be said to be definite and ascertainable within the meaning of those terms in section 26 of the Income-tax Act, 1961. Article 1120 lays down that the husband is not allowed to repudiate any estate without the consent of the wife, but the liability, if any, for 'pure acceptance', without the consent of the wife, would fall only on his half share and on the estate belonging exclusively to him.

9. Articles 1121 to 1124 are again important in so far as they deal with what happens on the termination of the communion of husband and wife. Article 1121 lays down that the communion terminates by dissolution of the marriage or by separation in conformity with law; and article 1122 enacts in the clearest possible terms that in case of death of one of the consorts, the survivor is to hold and manage the conjugal estate till the finalisation of the partition which in the language of Indian law means that the survivor would be a constructive trustee for the heirs or legatees of the deceased spouse till partition. Article 1123 then lays down that on partition between the consorts or their heirs, the property is to be divided equally and each spouse is to pay what he or she owes to the common estate and the next article 1124 provides that the wife is to be given credit for what is due to her prior to the payment of the credits of the husband, and in case the common estate is insufficient for payment of her entire claim, the husband is liable to pay the same out of his own estate, except in the case of a debt not imputable to him. This article further provides that the husband is not to enjoy a similar right of claim against the personal estate of the wife, presumably because it is he who has been in management of the communion property and is, therefore, responsible for the situation contemplated by article 1124.

10. Article 1189 states that the management of all the properties of the conjugal society belongs to the husband, but in the case of his absence or his suffering from any impediment, the wife may manage the same. Articles 1191 and 1193, however, impose restrictions on the rights of management of the husband or the wife, as the case may be; article 1191 provides that the husband cannot, in the course of his management, alienate immovable properties or move the court in respect of any dispute relating to the same, without the consent of the wife. Article 1203 lays down that the conjugal society can be interrupted either with regard to person or property of the consorts, or only with regard to property. Article 1204 states that it is permissible to the spouses to obtain the separation of persons and assets on the same grounds on which they could obtain a divorce under the law applicable to them, but article 1210 lays down that the separation of persons necessarily means a separation of estate, with the result that whilst there can be a separation of their estate simpliciter, there cannot be separation of persons without the necessary consequence of the separation of estate also. Article 1216 provides that the disposition between living consorts of the immovable properties which have devolved on each of them after separation depends on the consent of both, and in case either of them unreasonably withholds his or her consent, that difficulty can be solved by approaching the court. Article 1219 gives the wife a right to apply for a separation of estate simpliciter in a case in which she finds herself in manifest danger of losing her property due to maladministration by her husband. Article 1220 provides that the separation may fall on the estate which the wife might have brought to the conjugal society or which may have devolved to her thereafter, and on the half share of the properties which the spouses have acquired during matrimony. Article 1226 lays down that the separation of estate simpliciter does not release the wife from her obligation to contribute towards the expenses of the couple out of the income of her properties in proportion to her assets in relation to the assets of the husband. In order to understand these articles in their proper perspective, it must be remembered that they relate to a situation in which, though the spouses are separate in estate, the matrimonial bond continues. Article 1471 states that gifts of movables or money made by the husband without the consent of the wife must be placed to the account of his moiety, except in a case in which they are by way of reward, or are of little importance. The last article of the Portuguese Civil Code to which I need refer is article 1766 in which it is provided that persons married as per the custom of the country are not allowed, under the penalty of the transaction being null, to dispose of specific properties belonging to the conjugal society, except when such properties have been allotted to that spouse on partition, or the other spouse has consented to it, or in certain other cases to which it is unnecessary to refer. Article 10 of the Commercial Code enacts that the payment of the commercial debts of the husband, which are to be made through his half share in the common assets, can be prayed for before the dissolution of the marriage or separation; and the wife must be summoned so that, if she so desires, she may apply for judicial separation of the assets within the period provided in that article.

11. In my opinion, the only articles that need consideration in support of Mr. Joshi's contention that the shares of the husband and wife in communion property are not definite and ascertainable within the terms of section 26 of the Income-tax Act, 1961, are articles 1104, 1216 and 1220. In my opinion, however, none of the said three articles really help Mr. Joshi. Article 1104 applies only to the particular case of an ante-nuptial agreement in a marriage under articles 1096 and 1097, and can have no application to the present case which is not a case of such an agreement that is one of a marriage according to the custom of Goa. In the case of a separation of estate, article 1220 provides for the reciprocal divesting of properties brought in at the time of the marriage, but with regard to properties acquired during the marriage, it adopts the only practical course of a reciprocal vesting of half of it in each of the spouses. Article 1216 does not militate against the assessee's contention because there being only a separation, the bond of matrimony continues to subsist and the power of disposal is, therefore, on the lines of that under articles 1119, 1191 and 1193 which were applicable prior to that separation.

12. On a careful consideration of all the above provisions of the Portuguese Civil Code, as well as of article 10 of the Commercial Code, the following legal propositions emerge :

(i) During the subsistence of a marriage celebrated as per the custom of Goa, the ownership and possession of 'the common estate', immovable as well as movable, vests in both the husband as well as the wife. This is laid down in express terms in article 1117. Articles 1118 and 1119 as well as 1766 are also consistent with that legal position;

(ii) Proposition No. 1 applies to the corpus as well as the income of all communion property, unmovable as well as movable. The unique para. (proviso) to article 1109 lays down that even the income of property excluded from the communion is communion property. A fortiori the income from the communion property itself must be communion property;

(iii) Under articles 1117 and 1189, the husband has only a right of management, but even that right is not an absolute right so as to amount to the 'ownership' of the income, in view of the provisions of articles 1118, 1119, 1191 and 1219. Moreover, under the very articles 1117 and 1189, even the wife can be in management in certain contingencies, her right being similarly fettered under the provisions of article 1193;

(iv) In the corpus as well as the income of communion property, immovable as well as movable, the husband and the wife each have, during the subsistence of a marriage celebrated as per the custom of Goa, a fixed and certain half share which can be ascertained on the termination of the communion by divorce, separation or death (articles 1121 to 1124, 1203, 1204, 1210, 1216, 1220 and 1226). What is most important in this connection is that it is an admitted position that on the death of one of the spouses, communion property does not devolve by survivorship, but the half share of the deceased spouse goes by succession to his or her own heirs or legatees by virtue of articles 1122 and 1123. There is a consistent reference to the half share of each of the consorts throughout the different articles dealing with various situations (vide articles 1112 to 1114 of the Portuguese Civil Code, and article 10 of the Commercial Code dealing with the incidence of debts, and Portuguese Civil Code article 1118, dealing with the disposal of the movable property as well as articles 1120, 1123, 1220, 1463, and 1471).

13. Mr. Joshi on behalf of the Commissioner formulated two propositions in support of his case, and they are as follows :

(1) In communion properties, or their income, the husband and wife have each no definite and ascertainable share so long as the communion lasts; and

(2) If he is wrong in that view, in any event, the husband and wife do not each have a definite and ascertainable share in each individual property.

14. In support of these propositions, Mr. Joshi contended that under the Portuguese Civil Code the position of those married according to custom was akin to that of coparceners in a Hindu joint family, with only this difference that there is no right of survivorship as in the latter case. In that connection, Mr. Joshi relied upon the decision of the Madras High Court in the case of Arunachala Mudaliar v. Commissioner of Income-tax : [1961]41ITR432(Mad) in which there was a severance of status by a preliminary decree in a suit for partition of a Hindu joint family. Two of the sons were appointed joint receivers and were directed to divided the income among the father and sons equally, and to pay certain allowances. An application was made to the Income-tax Officer under section 25A(1) of the Act claiming that by reason of the preliminary decree a partition had taken place, but that application was rejected. The receivers were assessed under section 41 of the Income-tax Act as representing the Hindu undivided family on the ground that there was no division by metes and bounds. The Tribunal held that there being no order under section 25A(1), the Hindu undivided family must be deemed to exist for the purpose of the Income-tax Act, and that section 41 was not applicable to the case. On a reference to the High Court, what was held (at pages 444-445) was that the Income-tax Act clearly distinguished between an association of persons and a Hindu undivided family, that section 9(3) of the Indian Income-tax Act, 1922, did not apply as it could not override the special provision relating to a Hindu undivided family contained in section 25A, and that the Hindu undivided family was the owner for the purpose of assessment to tax so long as there was no partition in definite portions even when there had been a severance in status. I am afraid that the decision of the Madras High Court cannot be of any assistance to Mr. Joshi in the present case, for the simple reason that all that was held was that in the case of a Hindu undivided family section 9(3) could not be applied in view of the special provision in section 25A relating to partition. Since there had been no partition by metes and bounds, it was in view of section 25A that the claim to the applicability of section 9(3) was negatived by the Madras High Court. The special situation that prevailed in the said case can, therefore, bear no analogy to the present case. Mr. Joshi next contended that the position of the communion of the husband and wife in the present case is akin to that of partners during the subsistence of a firm under the Indian Partnership Act, and in support of that contention, he relied on the decision of the Rajasthan High Court in the case of New Cotton & Wool Pressing Factory v. Commissioner of Income-tax in which immovable properties were owned by a firm, and it was held that section 9(3) of the Indian Income-tax Act, 1922, had no application to such a case. In arriving at that conclusion, the Rajasthan High Court correctly held (at pages 667-669), on a review of the provisions of the Partnership Act, and particularly section 48 thereof, that a partner cannot claim any definite share in the property of the firm so long a as the firm was not dissolved and accounts settled as provided in section 48 of that Act. That view of the nature of a partner's interest during the subsistence of a firm, whatever be the character of the property brought in, is now confirmed by the Supreme Court in the case of Addanki Narayanappa v. Bhaskara Krishnappa : [1966]3SCR400 , in which, after referring to the relevant provisions of the Indian Partnership Act, the Supreme Court held that during the subsistence of a partnership no partner can deal with any portion of the property as his own, and that his right is merely a right to obtain such profits, if any, as fall to his share from time to time until dissolution, and, thereafter, to a share in the assets of the firm remaining after satisfying its liabilities as set out in section 48 of the Indian Partnership Act. That view was reaffirmed by the Supreme Court itself in the later case of Commissioner of Income-tax v. Juggilal Kamlapat : [1967]63ITR292(SC) . The legal position that entails in the case of partners during the subsistence of a firm has, therefore, no application to a case like the present one in which it could never be said that the husband or wife had no definite share of the immovable property of the communion during its subsistence. The reason why the Rajasthan High Court refused to apply the provisions of section 9(3) of the Indian Income-tax Act, 1922, is, therefore, wholly inapplicable in the case of the communion of husband and wife under the Portuguese Civil Code.

15. Mr. Joshi next contended that the expression 'definite and ascertainable' in section 26 contemplated a right in praesenti to partition and separate enjoyment, and in support of that proposition, he relied on the decision of the Supreme Court in the case of Commissioner of Income-tax v. Indira Balkrishna : [1960]39ITR546(SC) . The facts of that case were that one Balkrishna Purani died leaving behind him three widows and three daughters, and the three widows as legal heirs inherited the estate of the deceased which consisted of immovable properties, share in joint stock companies, money lying in deposit, and share in a registered firm. The Income-tax Officer took the status of the assessee as an association of persons and assessed them accordingly. On appeal to the Appellate Assistant Commissioner, it was held that, in any event, the income from property ought to have been assessed separately in the hands of the three widows under section 9(3) of the Indian Income-tax Act, 1922. On further appeal to the Tribunal, it was held that the Appellate Assistant Commissioner was wrong in applying section 9(3), as the three widows inherited and possessed the property of the deceased as joint tenants, and its income was, therefore, liable to be assessed in their hands in the status of an association of persons. On a reference to the High Court, the view by the Tribunal was reversed, and it was held that the three widows could not be assessed in the status of an association of persons with regard to the income which they earned as the heirs of their deceased husband. On appeal to the Supreme Court, that decision of the High Court was confirmed. It was observed by the Supreme Court that the position of co-widows under Mitakshara law was well-settled; that they succeeded as co-heirs to the estate of their deceased husband and took as joint tenants with rights of survivorship and equal beneficial enjoyment; and that they were entitled as between themselves to an equal share of the income. It was further held (at page 549) that though they took as joint tenants, no one of them had a right to enforce 'absolute partition' of the estate against others so as to destroy their rights of survivorship, but they had the right to obtain a partition of separate portions of the property so that each might enjoy her equal share of the income separately, though they had not chosen to do so in the said case. The Supreme Court pointed out (at page 550) that the Appellate Assistant Commissioner had held that section 9(3) applied to the income from the immovable properties in the said case and the department had not appealed from that decision to the Tribunal, and it was, therefore, not open to the Tribunal to go behind it. The Supreme Court, however, went on to state that the Tribunal was wrong in thinking that the respective shares of the widows were not definite and ascertainable and that, in its opinion, each of the co-widows had an equal share in the income, viz., 1/3rd, and the provisions of section 9(3) clearly applied in respect of the immovable properties. We are bound by this clear expression of opinion by the Supreme Court. In my opinion, the decision of the Supreme Court in Indira's case : [1960]39ITR546(SC) , far from helping Mr. Joshi, provides a complete answer to the contention of the revenue in this reference, because in that case, notwithstanding the fact that the co-widows' interest in their deceased husband's estate was not fixed absolutely but could fluctuate within certain limits, and notwithstanding the fact that there was under Mitakshara law a right of survivorship among the co-widows, they were held to have 'definite and ascertainable' shares in the estate of the deceased. A fortiori, the shares of the husband and the wife in the present case who, under the Portuguese Civil Code, have no right to survivorship in the communion property and whose shares therein cannot fluctuate in any contingency, must be held to be 'definite and ascertainable'. Though in Indira's case : [1960]39ITR546(SC) , the co-widows had a right in praesenti to partition, the decision of the Supreme Court was not based on that ground. On the contrary, it lays down that the right to partition need not be absolute. The decision of the Supreme Court in the said case, according to me, establishes the following proposition :-

(1) The court is not concerned with the label 'join tenants' or 'tenants-in-common', or with the fact that possession and management may be joint, or with the fact of the absence of a right to 'absolute partition';

(2) The fact that the co-widows had an equal share in the income of all the immovable properties was sufficient to attract the applicability of section 9(3). This shows that Mr. Joshi's contention that in order to attract the applicability of section 26 (which corresponds to the old section 9(3)), the share of each must be definite and ascertainable in respect of each individual property, cannot be accepted;

(3) The share in the corpus also must be definite and ascertainable though it need not be absolute. It is sufficient even if the right to partition of that definite and ascertainable share in restricted, or is available for a limited purpose only, as, for instance, for the purpose of enjoying the income separately, as was the position in Indira's case : [1960]39ITR546(SC) .

16. In Salmond on Jurisprudence, 12th edition, pages 254-255, it is stated that co-ownership may assume different forms, and that the two chief kinds of co-ownership in English law were 'in common' and 'joint ownership'. It is pointed out there that the most important difference between these two relates to the effect of the death of one of the co-owners. In ownership-in-common the right of a dead man descends to his successors like any other inheritable right; but on the death of one of two joint owners his ownership dies with him, and the survivor becomes the sole owner by virtue of his right of survivorship. Though it is not necessary to give a definite label to the relationship of the husband and wife during the subsistence of the communion, it is important to bear in mind that there is no right of survivorship between them and that their relationship under the Portuguese Civil Code is, therefore, more akin to a tenancy-in-common than to joint tenancy as known in English law. In Cheshire's Modern Law of Real Property, 11th edition, pages 327 to 337, it is stated that at common law there were four possible forms of co-ownership, one of which is now defunct, and the remaining three are joint tenancy, tenancy-in-common and coparcenary, of which the last one now seldom arises in England. Cheshire also states that the right of survivorship is one of the two essential attributes of joint tenancy as distinguished from tenancy-in-common. It is further stated there that in a tenancy-in-common each has a share in the ordinary meaning of that word, and that share is undivided in the sense that its boundary is not yet demarcated, but nevertheless his right to a definite share exists. Cheshire then points out that in the tail dying intestate leaving only female heirs, those female heirs succeeded jointly to the estate as a single heir, and were called coparceners. Like joint tenants, the coparceners had a unity of title, interest and possession, but like tenants-in-common their estate was unaffected by the doctrine of survivorship. There appears to me to be some resemblance between this concept of the English coparcenary and the position of the husband and wife during the subsistence of the communion under the Portuguese Civil Code.

17. Mr. S. P. Mehta on behalf of the assessee relied on the decision of the Calcutta High Court in the case of Commissioner of Income-tax v. Smt. Bani Rani Rudra : [1966]59ITR216(Cal) , which was a case of co-heirs under the Dayabhaga law in regard to whom section 9(3) of the Indian Income-tax Act, 1922, was applied even whilst the family was undivided. The facts of that case were that on the death of one. J. K. Rudra, his son and wife succeeded to the estate in equal shares. The question before the income-tax authorities was whether the income from the house properties could be assessed in the hands of the family or whether it should be treated as income in the hands of the individual members constituting the family. After referring to the legal position under Dayabhaga law under which the sons do not acquire any interest by birth and each coparcener has, even whilst the family remains undivided, a certain definite share in the joint property of which he is the absolute owner, the Calcutta High Court held that since on the death of J. K. Rudra, his widow became entitled to a moiety of the property with his son, section 9(3) was applicable and the income could not be assessed in the hands of the assessee-Hindu undivided family even if there was no partition between the widow and her son. It must be noted that under Dayabhaga law which was applicable to the parties in the said case, the coparcenary was first formed on the death of the said J. K. Rudra, and as between themselves the widow and the son of the deceased held his property as coparceners, each of them having the absolute power to dispose of his or her share. There is, therefore, also some similarity between the position of co-heirs under Dayabhaga law and the position of the husband and wife during the subsistence of the communion under Portuguese Civil Code, with this difference that there is no power of disposal in each of them in the latter case as in the former.

18. The result of a consideration of these authorities is that none of them deal with a legal position which is exactly the same as that of a husband and wife during the subsistence of the communion under Portuguese Civil Code, and apart from the indirect guidance that one can get from the judgment of the Supreme Court in Indira's case : [1960]39ITR546(SC) cited above, none of them are of any direct assistance for the purpose of answering the question posed in this reference.

19. Mr. Joshi contended that if the income of the property held in communion is not assessed as the income of the 'body of individuals' of the husband and wife, but is assessed separately in the hands of each spouse, it will be a personal debt of each spouse, and having regard to the provisions of articles 1113 to 1116 of the Portuguese Civil Code the department will not be entitled to recover it from the communion property, except on partition. This would ordinarily be a good argument on the principle of harmonious construction between two statutes, or on the ground that the legislature could not have intended such an inconvenient result to follow. Those principles of construction have, however, no application to the construction of the provisions of two different systems of jurisprudence enacted by the legislatures of two different countries which, in the unusual situation that has arisen by reason of the merger of Goa in India, may well be irreconcilable. I, therefore, hold that the difficulty in effecting the recovery of tax is not ground for placing the construction urged by Mr. Joshi, if the contrary position is clear on a proper construction of the relevant provisions of the Portuguese Civil Code read with article 10 of the Commercial Code.

20. In the result, I hold that under the Portuguese Civil Code read with article 10 of the Commercial Code, in the case of a husband and wife married according to the custom of Goa, each of them has a definite and ascertainable share in the corpus as well as in the income, the management alone being with the husband. As Mr. Mehta has rightly contended, restrictions on the enjoyment or management of the property which are to be found in the Portuguese Civil Code do not contravene any requirement of section 26 of the Income-tax Act, 1961. The Tribunal was, therefore, right in the view which it took that section 26 applied, and the question referred to us must be answered against the Commissioner.

S.K. Desai, J.

21. I agree and have nothing to add.

BY THE COURT. - We answer the question referred to this court as follows :

On the facts of the case, and having regard to the relevant provisions of the Portuguese Civil Code and article 10 of the Commercial Code, the respective half shares of the husband and wife in the income from the house property which is the property of the communion of the husband and wife married according to the custom of Goa, should be assessed separately in equal shares in the hands of each of them, and not in the hands of 'the body of individuals' of the communion of husband and wife, for the relevant assessment year.

22. The Commissioner must pay the costs of the reference to the assessee.


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