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Maharaj Prithvi Raj Vs. Income-tax Officer - Court Judgment

LegalCrystal Citation
CourtIncome Tax Appellate Tribunal ITAT Delhi
Decided On
Judge
Reported in(1984)9ITD792(Delhi)
AppellantMaharaj Prithvi Raj
Respondentincome-tax Officer
Excerpt:
.....huf consisted of sawai man singh, his four sous and his wife. under proviso to section 8 of the hindu succession act, 1956, as sawai man singh left a female relative specified in class i of the schedule to the said section, the interest of the deceased devolved by intestate succession under the said act.3. the revenue has not accepted the tribunal's order that sawai man singh headed a huf. according to the revenue, the status of sawai man singh was individual. the ito, accordingly, held that on the death of the said individual in 1970, his estate devolved by succession on his six heirs, namely, his widow, four sons and a pre-deceased daughter's daughter. as prithvi raj (the assessee before us) was one of the four sons, the ito held that one-sixth share of the income of the estate of.....
Judgment:
1. As common points are involved in these cross-appeals by the assessee and the revenue in the cases of Maharaj Prithvi Raj (individual) and Maharaj Prithvi Raj (HUF) for the assessment years 1977-78 and 1978-79, these appeals were heard together and are disposed of by a consolidated order.

2. Maharaj Prithvi Raj is one of the four sons of Sawai Man Singhji, late Maharaja of Jaipur. It was held by the Tribunal in the case of the said Sawai Man Singh [IT Appeal No. 1534 (Delhi) of 1977-78], for the assessment years 1969-70 and 1970-71 that he headed a HUF, constituted by him, his wife and his four sons. Sawai Man Singh died in June 1970 intestate. At that time HUF consisted of Sawai Man Singh, his four sous and his wife. Under proviso to Section 8 of the Hindu Succession Act, 1956, as Sawai Man Singh left a female relative specified in Class I of the Schedule to the said section, the interest of the deceased devolved by intestate succession under the said Act.

3. The revenue has not accepted the Tribunal's order that Sawai Man Singh headed a HUF. According to the revenue, the status of Sawai Man Singh was individual. The ITO, accordingly, held that on the death of the said individual in 1970, his estate devolved by succession on his six heirs, namely, his widow, four sons and a pre-deceased daughter's daughter. As Prithvi Raj (the assessee before us) was one of the four sons, the ITO held that one-sixth share of the income of the estate of the late Sawai Man Singh was assessable in the hands of the Prithvi Raj in the status of HUF (sic).

4. The Commissioner (Appeals) following the Tribunal's order (holding that Sawai Man Singh headed a HUF) held that on the death of Sawai Man Singh, there was a complete partition of the HUF headed by Sawai Man Singh and Prithvi Raj as a coparcener got one-sixth share out of the estate of the said HUF which stood completely partitioned on the death of Sawai Man Singh. He further held that one-sixth share of Sawai Man Singh (in the HUF estate) devolved by intestate succession on his six heirs and as Prithvi Raj was one of the six heirs, therefore, he (further) got one-thirty-sixth share but this share he received in the status of individual.

5. The first controversy raised by the assessee before us is whether on the death of Sawai Man Singh there was a complete partition of the HUF headed by Sawai Man Singh or only one-sixth share of Sawai Man Singh in the HUF estate got separated while five-sixths share in the estate of HUF (belonging to other coparceners and Sawai Man Singh's widow) remained joint and the remaining coparceners and the widow continued to belong to a bigger HUF. The decision regarding the partial or complete partition of the HUF headed by Sawai Man Singh depends on the interpretation of Gurupad Khandappa Magdum v. Hirabai Khandappa Magdum [1981] 129 ITR 440 (SC). This matter came up before the Tribunal Delhi Bench 'B' in the assessment years 1971-72 to 1976-77 in WT Appeal Nos.

885-890 (Delhi) of 1982 in the case of WTO v. H.H. Sir Sawai Man Singhji of Jaipur [1984] 7 ITD 401, where the Tribunal has interpreted Gurupad Khandappa Magdunfs case (supra) and held that on the death of Maharaja Man Singh, there was not only a partition in respect of the share of the late Maharaja in the HUF property but the partition was complete and the late Maharaja's widow and his four sons' shares also got partitioned as there was a complete partition of the HUF. The Tribunal had rejected the assessee's reliance on Sushilabai Ramchandra Kulkarni v. Narayanrao Gopalrao Deshpande AIR 1975 Bom. 157 (FB) and Maharani Raj Laxmi Kumari Devi v. CED [1980] 121 ITR 1002 (All.). We have followed the said decisions of the Tribunal in the case of the assessee's brothers, namely in our order in Maharaja Jagat Singh [IT Appeal Nos. 1487-89 (Delhi) of 1983, dated 14-3-1984 and Jai Singh [IT Appeal No. 1445-7 (Delhi) of 1983, dated 14-3-1984].

5A. At the hearing before us, the learned Counsel for the assessee relied on the observations in Mulla on Principles of Hindu Law, 15th edition, at page 929 interpreting Gurupad Khandappa Magdunfs case (supra) that the said decision does not say that 'the fiction and notional partition must bring about total disruption of the joint family or that the coparcenary ceases to exist even if the deceased was survived by the coparceners'.

6. We are unable to accept this submission in view of the categorical observations of the Supreme Court extracted by the said commentator Mulla at page 929, namely, that 'the assumption (of partition) having been made once for the purposes of ascertaining the share of the deceased in the coparcenary property, one cannot go back on that assumption and ascertain the share of the heirs without reference to it. The assumption which the statute requires to be made is that a partition had, in fact, taken place must permeate the entire process of ascertainment of the ultimate share of the heirs ... all the consequences which flow from a real partition have to be logically worked out, which means that the shares of the heirs must be ascertained on the basis that they have separated from one another and had received a share in the partition which had taken place during the lifetime of the deceased. We are fortified in taking this view by the Tribunal Delhi Bench 'B' order in Sawai Man Singhji's (HUF)'s case (supra) where similar view has been taken. Respectfully following the said decision, we confirm the order of the Commissioner (Appeals) that there was a complete partition of the HUF (headed by Sawai Man Singh) on his death.

7. The next controversy is the status in which the assessee is assessable, i.e., 'individual or HUF', in respect of the said one-thirty-sixth share in the estate of the late Maharaja which the assessee got on succession, being one of the six heirs of the late Maharaja. Similar is the controversy regarding one-sixth share in the income of the assets of the late Maharaja outside India which the assessee got on succession. The assessee claimed that he got the said shares on succession, in the status of HUF and the said shares were at par with the one-sixth share which the assessee had in the HUF, headed by the late Maharaja. The Commissioner (Appeals), however, in para 7.1 in his order in the case of individual held that under Section 8 of the Hindu Succession Act, the said shares (one-thirty-sixth of Indian estate and one-sixth of foreign estate) were assessable in the status of individual and so was one-eighteenth share in the assets of the assessee's late mother.

8. At the hearing before us, the learned Counsel for the assessee relied on CIT v. Dr. Babubhai Munsukhbhai [1977] 108 ITR 417 (Guj.) where it was held that son inheriting the self-acquired property of his father takes it as the joint family property of himself and his son, and not as his separate property. Similar view has been taken in Brijlal v. Daulat Ram 79 Punjab LR 27 and CGT v. Smt. Gollapudi Santhamma [1979] 116 ITR 930 (AP) where it was held that properties settled by adoptive father on adoptive son is ancestral property in the hands of donee son.

9. The learned departmental representative relied on CIT v. Ram Rakshpal Ashok Kumar [1968] 67 ITR 164 (All.), CIT v. Smt.

Nagarathnamma [1971] 76 ITR 352 (Mys.), CWT v. Chancier Sen [1974] 96 ITR 634 (All.) and Addl. CIT v. P.L. Karuppan Chettiar [1978] 114 ITR 523 (Mad.)(FB).

10. We have carefully gone through the rulings relied on by both the sides. We find that the majority of the High Courts have taken the view that the self-acquired property inherited by the son is covered by Section 8 of the Hindu Succession Act, and as son's son is excluded under the said section, therefore the son alone inherits the property to the exclusion of his son. The Madras High Court in P.L. Karuppan Chettiar's case (supra) reviewed the case law, namely, Smt.

Nagarathnamma's case (supra), Ram Rakshpal Ashok Kumar's case (supra), CWT v. Harshadal Manlal [1974] 97 ITR 86 (Guj.) and Shasiram Agarwalla v. CGT [1968] 69 ITR 235 (Assam & Nagaland) which supported the view mentioned above and dissented from Dr. Babubhai Mansukhbhai's case (supra).

11. In P.L. Karuppan Chettiar's case (supra) there was partition between father and son and subsequently, the father died and the son inherited father's properties and the question was whether the properties so inherited were separate properties of the son or of the joint family headed by the son. The Full Bench of the Madras High Court interpreting Section 8 of the Hindu Succession Act observed that under the Hindu law, the property of a male Hindu devolved on his death on his sons and grandson, as the grandson had an interest in the property.

However, as Section 8 of the Hindu Succession Act excluded son's son, therefore, only the son inherited the property to the exclusion of his son and, therefore, no interest accrued to the grandson in the property left by the deceased and as Section 8 was directly derogatory of the law established according to the Hindu law, the statutory provisions must prevail in view of the unequivocal intention declared in the statute itself of the Income-tax Act, 1961, whose Section 4(1) overrode the established provisions of the text of Hindu law. Therefore, the son alone took the property inherited from his father to the exclusion of grandson of the deceased. Referring to the Gujarat High Court's decision in Dr. Babubhai Mansukhbhai's case (supra), at page 420, the Madras High Court observed that the Gujarat High Court's reliance on observations in Mulla's Principles of Hindu Law, 14th edition, page 847 was misplaced because the commentator was not dealing with the effect of Section 8 of the Hindu Succession Act but only with the position under the Hindu law untrammelled by statutes and it occurred in the commentary to Section 6 of the said Act which dealt with survivorship and saving by Section 6 of that principle to the extent to which it has been done and the said passage in the said commentary was of no assistance in, determining the impact of Section 8 on the principle of devolution of property on the death of a male Hindu.

12. In Shrivallabhdas Modani v. CIT [1982] 138 ITR 673 which was followed in CIT v. Ratanlal [1982] 138 ITR 680 the Madhya Pradesh High Court (Indore Bench) followed P.L. Karuppan Chettiar's case (supra) and dissented from Dr. Babubhai Mansiikhbhai's case (supra). They took the same view as the Madras High Court on the interpretation of Section 8 of the Hindu Succession Act noting that son's son was not mentioned as a heir under Class I of the Schedule to Section 8 and, therefore, son's son cannot get any right in the property of his grandfather and, therefore, the earlier interpretation of Hindu law giving grandson a right by birth in the grandfather's p/operties ceased to have effect and that Section 8 should be taken as a self-contained provision laying the scheme of devolution of the property of a Hindu dying intestate.

13. The Calcutta High Court in Makhand Thirani & Sons v. CIT [ 1980] 121 ITR 976 took the same view and held that on the death of a Hindu, the deceased's widow, sons, etc., inherited his properties absolutely under Section 8 and each son of the deceased became the absolute owner of his share received on succession and son's son had no interest whatever in the property so devolved.

14. The Allahabad High Court in Chander Sen's case (supra) took the same view as was taken by the said High Court in Ram Rakshpal Ashok Kumar's case (supra), namely, that son got absolute right in the property inherited from his father and to the exclusion of son's son.

15. It may be mentioned at this stage that the Andhra Pradesh High Court in Smt. Gollapudi Santhamma's case (supra) has not considered the Hind Succession Act at all, and has considered only the Hindu Adoption and Maintenance Act and the general principles of Hindu law that the property which is inherited by a male Hindu from his father is ancestral property in his hands. The said High Court having not at all considered the provisions of Section 8, the aforesaid judgment is of no assistance for deciding the controversy before us.

16. Respectfully following the decisions of the majority of the High Courts, we uphold the finding of the Commissioner (Appeals) that one-thirty-sixth share in the estate of the deceased Maharaja and one-sixth share in the assets left by late Maharaja abroad devolved on the assessee in his individual status as a heir of the late Maharaja.

17. No arguments were addressed before us regarding one-eighteenth share in the assets of the assessee's late mother. We, accordingly, confirm the Commissioner (Appeals)'s finding that the said share was held by the assessee as an individual.

18. In the result, all the appeals by the assessee and the revenue stand dismissed.


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