V. G. OAK C.J. - The Income-tax Appellate Tribunal, Hyderabad Bench, has referred the following question of law to this court :
'Whether the assessee, who has no male issue, constitutes a Hindu undivided family with his wife and unmarried daughters in respect of the income from property which has fallen to his share on partition ?'
Shri Beni Prasad is the assessee. The assessment year is 1958-59. The assessee is the son of Shri Manmohan Das Tandon. At one time the joint family consisted of Shri Manmohan Das Tandon and his five sons including the present assessee. There was a complete partition between the members of the joint family. For several years Shri Beni Prasad was assessed in the status of an individual. He was so assessed for the assessment year 1958-59 also. The income so assessed included the income received from the property allotted to Shri Beni Prasad upon partition. The assessee appealed. He raised the point that, although a sum of Rs. 26,476 was his personal income, the income derived from the property allotted upon partition was income of the Hindu undivided family consisting of himself, his wife and minor daughters. This contention was not accepted by the Appellate Assistant Commissioner. He dismissed the appeal, and confirmed the order of the Income-tax officer. Upon further appeal, the contention raised by the assessee was liable to pay tax on the amount of Rs. 26,476, the rest of the income should be excluded from the assessment of the appellant in his individual status. The appeal was allowed accordingly. The Commissioner of Income-tax, U.P., applied for a reference to the court raising the point that the Tribunal was wrong in holding that the income from property received upon partition was not the assessees separate income. The Tribunal has accordingly referred the question of law quoted above.
Kalyanji Vithaldas v. Commissioner of Income-tax is a decision of the Privy Council. On page 94 of the judgment their Lordship observed :
'There remain the case of Kanji and Sewdas.......Without deciding the question which was left open in....their Lordships, for the purposes of the present case, will assume that their interest was ancestral property, so that, if either had 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 there 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 mans 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 coparcenary interest, but the mere existence of a wife or daughter does not make ancestral property joint.'
It was further observed on page 96 :
'.....it would not be in consonance with ordinary or with a correct interpretation of the law of 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.'
Attorney-General v. Arunachalam Chettiar is another decision by the Privy Council. In that case a Hindu undivided family consisted of the father, a son and several females. The son died in 1934. The father died in 1938. No other coparcener came into existence between on 1934 and 1938. The fathers widow and the sons widow had powers of adoption. These powers were in fact exercised after the fathers death. It was 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 of which the continuity was preserved after the fathers death by the adoptions.
In Krishnamurthi v. Dhruwaraj B died in 1882 predeceasing his father, N, and leaving behind his widow, T.N. died in 1892 leaving behind K, his daughter, who succeeded to his property as full owner. K died in 1933, and her son, V, who has succeeded to her property also died in 1934 leaving behind two sons, the appellants. T adopted D, the respondent in 1945. It was held that the respondent was entitled to succeed in the suit as his adoption had the effect of divesting the family of the property inherited from K.
In Arunachala Mudaliar v. Muruganatha Mudaliar their Lordships of the Supreme Court observed at page 499 thus :
'The property of the grand-father can normally vest in the father as ancestral property if and when the father inherits such property on the death of the grand-father or receives it, by partition, made by the grand-father himself during his lifetime. On both these occasions, the grand-fathers property comes to the father by virtue of the latters legal right as a son or descendant of the former and consequently it becomes ancestral property in his hands.'
In Commissioner of Wealth-tax v. Lt. Col. D. C. Basappa it was held by the Mysore High Court that where a male member of a Hindu undivided family has received on partition a portion of the joint family property for his share, he must be assessed in respect of the property which he has received on partition as the karta of a Hindu undivided family and not as an individual, even though his family does not include any other male member but consists only of himself and his wife and daughters.
In Gowli Buddanna v. Commissioner of Income-tax it was explained that there need not be more than one male member to form a Hindu undivided family as a taxable entity under the Income-tax Act. In that case A, his wife, his two unmarried daughters and adopted son, B, were members of a Hindu undivided family. A died. It was held that the property of the joint family did not cease to belong to the family merely because the family was represented after his death by a single coparcener, 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.
In Pannalal Rastogi v. Commissioner of Income-tax it was held by the Patna High Court that the sole surviving male coparcener of a Hindu undivided family must be assessed in respect of his ancestral property on the status of a Hindu undivided family and not as an individual.
In Pratap Narain v. Commissioner of Income-tax it was held by this court that property received by a member of a Hindu joint family, who has a wife, but no male issue, on a partition of the joint family properties, and the income from such properties, belong to the Hindu undivided family composed of the member and his wife and not to the member as an individual.
The same view was taken by this court in Gajanand Sutwala v. Commissioner of Income-tax
The problem of share allotted on partition has been discussed in Mullas Hindu Law, 13th edition, page 249, thus :
'The share which a coparcener obtains on partition of ancestral property is ancestral property as regards his male issue. They take an interest in it by birth, whether they are in existence at the time of partition or are born subsequently.'
In Adurmony Deyi v. Chowdhry Sib Narain Kur there was a suit by a son to set aside an alienation of property made by his father during the sons minority. The property originally belonged to the plaintiffs grand-father who had a partition of the property with his brother. Upon the plaintiff, divided the estate between them. The property in suit fell to the share of the plaintiffs father. It was sought to set aside the alienation on the ground that there was no legal necessity. It was held that notwithstanding the partition by the plaintiffs father, the property was ancestral property in which the plaintiff at his birth acquired an interest.
It is true that the observations made by the Privy Council in Kalyanji Vithaldas v. Commissioner of Income-tax lend some support to the contention of Mr. Gopal Behari appearing on behalf of the Commissioner, U.P., that under such circumstances the property should be treated as separate property of the individual assessee. But it may be pointed out that in Kalyanji Vithaldass case the Judicial Committee was not dealing with a case where a member of a joint Hindu family had received property by a partition. The preponderance of judicial authority is in support of the view that, upon partition, the property retains the character of joint family property. We see no sufficient reason for departing from the view taken by this court in Pratap Narain's case. We are of opinion that the property under consideration should be regarded as property belonging to the Hindu undivided family consisting of the assessee, his wife and minor daughters, and not property exclusively belonging to the assessee.
We, therefore, answer the question referred to this court in the affirmative. The assessee shall get costs from the Commissioner of Income-tax, U.P. These costs we assess at Rs. 200. The fee of the special counsel for the Commissioner is also assessed at Rs. 200.