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T.J. Vijaya Kumar Vs. Wealth-tax Officer - Court Judgment

LegalCrystal Citation
CourtIncome Tax Appellate Tribunal ITAT Madras
Decided On
Judge
Reported in(1983)3ITD11(Mad.)
AppellantT.J. Vijaya Kumar
RespondentWealth-tax Officer
Excerpt:
.....below have missed the vital point that sivasubramaniam chettiar after having separated from the joint family had absolute right to dispose of the share of the property received by him under the partition deed dated 19-4-1946, since he could under section 30 of the hindu succession act will away his share. it cannot also be disputed that the properties acquired by his own funds after the partition, were also his absolute properties in which he had unrestricted power of disposition. it has been held by the madras high court in the case of addl. cit v. p.l. karuppan chettiar [1978] 114 itr 523 (fb) that property devolving after the partition would not constitute joint family property in the hands of the recipient. since in the present case also the properties received by jambulingam.....
Judgment:
1. These appeals by the assessee reiterate the claim to exclude certain properties on the ground that they do not form part of the net wealth of the assessee-HUF.2. The assessee is a HUF whose karta was T.S. Jambulingam. The father of Jambulingam, T.S. Sivasubramaoiam Chettiar, effected a partition between himself and his three sons by deed dated 19-4-1946. He then left a will dated 5-7-1965 in which he stated that the properties received by him from the above partition as well as the properties which were his self-acquisitions after the partition were to go to his three sons equally, absolutely and for ever. In the will he also made a provision that a particular house should be maintained as a residence of all the family members and that the movable properties should go to his wife and grand children. The claim before the WTO was that the one-third share of the properties so bequeathed by the will in favour of T.S. Jambulingam could be assessed only as the individual properties of Jambulingam and should, therefore, be excluded from the net wealth of the HUF. The WTO was of the view that it was not clear as to what properties were self-acquired and which were ancestral and, therefore, the claim could not be allowed. The AAC was of the view that the will itself was only an attempt to partition his properties among his sons and, therefore, the properties bequeathed could not be treated as the individual properties of Jambulingam.

3. After hearing the revenue, we are of the opinion that the authorities below have missed the vital point that Sivasubramaniam Chettiar after having separated from the joint family had absolute right to dispose of the share of the property received by him under the partition deed dated 19-4-1946, since he could under Section 30 of the Hindu Succession Act will away his share. It cannot also be disputed that the properties acquired by his own funds after the partition, were also his absolute properties in which he had unrestricted power of disposition. It has been held by the Madras High Court in the Case of Addl. CIT v. P.L. Karuppan Chettiar [1978] 114 ITR 523 (FB) that property devolving after the partition would not constitute joint family property in the hands of the recipient. Since in the present case also the properties received by Jambulingam under the will came to him by succession with absolute right of ownership and not by survivorship, those properties cannot be treated as joint family properties merely because they happened to be ancestral properties at an earlier stage.

4. However, it is pointed out on hehalf of the revenue that the ITO had taken another ground for rejecting the claim, namely, that the assessee had shown the income from those properties as the income of the HUF. In other words, the contention is that even if the properties devolving by testamentary succession were individual properties of Jambulingam, he could have impressed them with the character of joint family properties by any declaration or conduct. On this aspect, we find there is paucity of evidence because the WTO has not identified the properties in respect of which the assessee could be said to have impressed them with the character of joint family properties. There is no declaration of any such conversion on record. It may be pertinent to find out the treatment of the properties received by the other sons also. It is also noticed that there was a subsequent partition between Jambulingam and his sons and proceedings under Section 171 of the Income-tax Act, 1961, are pending though it is not clear whether any of the properties which devolved by testamentary succession were either partially or fully partitioned between Jambulingam and his sons. Since this question as to whether Jambulingam has impressed the properties received by testamentary succession with the character of joint family properties is a question of fact, to be decided with reference to relevant evidence and as such evidence is not on record, we deem it fit to set aside the orders of the authorities below on this point and restore the matter to the WTO for fresh disposal in accordance with law after marshalling all the necessary evidence.

5. In the result, the appeals are treated as allowed for statistical purposes only.


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