1. At the instance of the Commissioner of Income-tax under s. 256(1) of the I.T. Act, 1961, in I.T.Rs. Nos. 76 and 80 of 1975 and I.T.R. No. 46/77 and under s. 27(1) of the W.T. Act, 1957, in W.T.Rs. Nos. 9 to 13 of 1975, an identical question in each case has been referred to this court for its opinion :
'Whether, on the facts and in the circumstances of the case and on a proper interpretation of the will of L. Acharaj Ram dated October 28, 1963, the Tribunal was correct in holding that half share in the immovable property and shares in the company, etc., which devolved on the assessed on the death of his father were held by him in the capacity as karta of the HUF, consisting of himself, his wife and children and not in his individual capacity ?'
2. Shri Shambhu Ram Soni, the assessed, is an individual. He is one of the sons of Lala Acharaj Ram. Lala Acharaj Ram owned considerable self-acquired properties. He executed a will on October 28, 1963, in these words :
'THIS IS THE LAST WILL AND TESTAMENT OFme, Acharaj Ram, son of L. Saligram, caste Swamy, residentof 11/9, Pusa Road, New Delhi.WHEREAS my family consists of :-Smt. Krishna - daughter of L. Chan Lal(my wife).Shri Shambhooram - major son.Shri Vishwanath - major son.Smt. Malika, wife of L. Banarsilal.Smt. Tara Mohini, wife of L. Bhag Chand.Smt. Shanti, wife of L. Prithviraj.(Sd.) Achraj Ram Smt. Kanta, wife of L. Jagpal.WHEREAS I am possessed of the following immovable andmovable property :House No. 11/9, Pusa Road, New Delhi.Four shops with balakhana situate inGandhi Cloth Market (Karta Alladiya)Chandni Chowk, Delhi.Share in firm Achrajram, Shambhooram,Gandhi Cloth Market,Chandni Chowk, Delhi.Share in firm Achrajram & Sons,Afsal Market, Kabul.Insurance policies worth about Rs. 63,000.(Sd.) Shivsaran Some shares and other household effects and28-10-63 other such like movables.WHEREAS I am the owner of all the above property and shallremain thereof till my death.1. I appoint my sons Shri Shambhooram andVishwanath as the executors and trusteesof this will.(Sd.) Bhringeshwar 2. I give and bequeath Rs. 40,000 (rupeesSahni forty thousand only), to my daughter,28-10-63 Shrimati Shanti, for purchase of a house.My sons, the trustees of this will, will buyher a house with her approval for the above-said amount within 2 years from the dateof my death. Till the purchase of the house,my sons shall pay Rs. 300 per month tomy said daughter so that she lives in asuitable accommodation.I expect to receive about Rs. 40,000 frommy insurance policies during the year1964.In case I buy her a house in my lifetime,then Smt. Shanti shall not be entitled toany further amount on my death.(Sd.) Acharaj Ram 3. I give and bequeath Rs. 15,000 (Rs. fifteenthousand only) to my daughter, Smt.Kanta, which my sons will pay to herwithin 2 years after my death.4. I give and bequeath Rs. 5,000 (rupees fivethousand only) to each of my grand-daughters, Smt.Malika and Smt. TaraMohini. My daughters will spend thesesums on their marriages. Till the marriagesof my said grand-daughters, this sum willremain with my sons.(Sd.) Shivsaran 5. As I have already given sufficient amounts28-10-63 to my grand-daughters, Malika and TaraMohini, and they are well placed in life,thereforee, I feel no necessity to leave any-thing further for them.(Sd.) Bhringeshwar 6. My wife, Smt. Krishna, shall be entitled toSahni live in the family house, 11/9 Pusa Road,28-10-63 New Delhi, and shall be entitled to receiverents of the back quarters of this housetill her death as maintenance. At presentthe monthly rent is about Rs. 500. In casemy sons decide to sell this house, then theyshall be liable to provide her with asuitable residence in accordance with herstatus and buy her a property fetching arent of Rs. 500 per month or pay herRs. 500 per month at her choice. My wifewill invest all her money with my sons andshall be entitled to receive interest at themarket rate.7. Rest of my property immovable andmovable whatsoever and wheresoever shallbe shared equally by my two sons, Shamb-ooran and Vishwanath.IN WITNESS WHEREOF, I, Acharajram, afterhaving been explained the contents of thiswill and after having understood it, havehereto set my hands at New Delhi, this28th day of October, 1963.(Sd.) Testator'.
3. Lala Acharaj Ram died on September 2, 1964. The assessed claimed the at he had received one-half share in the property of Lala Acharaj Ram, the other half being received by Shri Vishwanath. The assessed claimed that he had received the property by virtue of the said will and, as such, the property is of the HUF consisting of the assessed and his minor son. The ITO did not accept the claim of the assessed and assessed half share in those properties as the assessed's income in his individual hands. On appeal, the AAC confirmed the order of the ITO. The assessed came in appeal before the Income-tax Appellate Tribunal. The question of law before the Tribunal depended upon the construction of the said will dated October 28, 1963, as to whether these properties belonged to the assessed in his individual capacity or whether he held them as karta of the joint Hindu family consisting of himself, his wife and his son. The Tribunal, after interpreting various terms of the will and after considering various cases cited, came to the conclusion that the properties in question were taken by the assessed in his capacity as karta of the joint Hindu family consisting of himself, his wife and son. The Tribunal directed that the income from those properties has to be excluded from the assessments under appeal which had been made in the individual status.
4. The late Acharaj Ram acquired by his own exertions large properties, both movable and immovable, including shares, etc. The fact that all the properties earned by him were his self-acquired properties is not in dispute. In fact, the recital of the will says that the testator is the owner of all the properties detailed therein and would remain the owner thereof till his death. The incidents of separate or self-acquired property of Hindu are well established and may be stated. Such property belongs exclusively to him in which no other member of the coparcenary, not even his male issues, acquires any interest by birth. He may dispose of it in any manner whatsoever without any limitation or restriction. He may sell it, he may transfer it by way of a gift or bequeath it by will to any person including his sons. If he dies intestate, then the property is inherited by the law of succession. If a Hindu dies intestate, the property which is inherited by his male issues would become ancestral property in the hands of the male issues. Where a Hindu, instead of allowing his self-acquired property to go by descent, makes a gift of it to his sons or bequeaths it to them under and by a will, a question arises whether such property is the property of the son, or whether it becomes ancestral in the hands of the son as regards the son's male issues.
5. Property gifted or bequeathed by a father to his son cannot become ancestral property in the hands of the son simply by reason of the fact that he got it from his father. The father is quite competent when he makes a gift or a bequest to provide expressly either that the son would take it exclusively for himself or that the gift or bequest would be for the benefit of his branch of the family headed by the son. If there are express terms or provisions to that effect in the deed of gift or will, the interest which the son would take in the properties would depend on the terms of the grant. In the absence of clear words, the question would be one of construction of the gift deed or the will. The law in this regard was laid down by the Supreme Court in C. N. Arunachala Mudaliar v. C. A. Muruganatha Mudaliar : 1SCR243
'As the law is accepted and well settled that a Mitakshara father has complete powers of disposition over his self-acquired property, it must follow as a necessary consequence that the father is quite competent to provide expressly, when he makes a gift, either that the donee would take it exclusively for himself or that the gift would be for the benefit of his branch of the family. If there are depress provisions to that effect either in the deed of gift or a will, no difficulty is likely to arise and the interest which the son would take in such property would depend upon the terms of the grant. If, however, there are no clear words describing the kind of interest which the donee is to take, the question would be one of construction and the court would have to collect the intention of the donor from the language of the document taken along with the surrounding circumstances in accordance with the well-known canone of construction. Stress would certainly have to be laid on the substance of the disposition and not on its mere form.
The material question which the court would have to decide in such cases is, whether taking the document and all the relevant facts into consideration, it could be said that the donor intended to confer a bounty upon his son exclusively for his benefit and capable of being dealt with by him at his pleasure or that the apparent gift was an integral part of a scheme for partition and what was given to the son was really the share of the property which would normally be allotted to him and in his branch of the family on partition. In other words, the question would be whether the grantor really wanted to make a gift of his properties or to partition the same. As it is open to the father to make a gift or partition of his properties as he himself chooses, there is, strictly speaking, no presumption that he intended either the one or the other.'
6. On a construction of the document in that case, the Supreme Court held that the gift was given exclusively to the donee and not for the benefit of his branch f the family. If a son gets the property of his father by inheritance or in partition, it being ancestral under Hindu law, he becomes a co-owner with his son or sons. The father can bequeath his self-acquired property to his son or sons absolutely or to the branch of his or their family. The latter depends upon the nature of the bequest made.
7. Relying upon the law laid down by the Supreme Court in the aforesaid case, Shri K. K. Wadhera, the learned counsel for the Revenue, contends that there are no clear words in the will describing the kind of interest which the assessed is to take. The court is called upon to collect the intention of the testator from the language of the document taken along with the surrounding circumstances in accordance with the well-known canone of construction. The counsel then referred to the construction of the documents made in S. Parthasarathi v. CIT  61 ITR 474 , CIT v. Periakaruppan Chettiar : 71ITR601(Mad) , Periakaruppan Chettiar v. CIT : 99ITR1(SC) and CIT v. Khimji Teju Kaya : 115ITR168(Bom) . In those cases, the court gathered the intention of the testator from the language of the document taken along with the surrounding circumstances and came to its own conclusion.
8. Shri G. C. Sharma, the learned counsel for the assessed, who took us in extenso through the provisions of the will and particularly clause 7, again and again urges that the testator was providing for the members of his family and it was clear from the provisions that after providing for the daughters and the grand-daughters and his wife, he bequeathed the rest of his property, movable and immovable whatsoever and wheresoever, to be shared equally by his two sons, the assessed and his brother for the benefit of their families. According to the counsel, the language of clause 7 of he will is the unequivocal expression of the desire of the testator to benefit the families of the two sons. Firstly, the words 'whatsoever and whosesoever' in clause 7 embrace the future property of the testator and such a disposition is in consonance with the scheme of partition. Secondly, the words 'shared equally' is the change of the language from the earlier part of the will and it partitions the property between the two sons. This is merely stated to be rejected. The words used do not explicitly indicate that it is a devise to partition the property for the benefit of the two branches of the families of the two sons. The terms of the document are not clear in favor of the assessed's case. The terms do not in clear words describe the kind of interest the two sons are to take. The counsel then points out the surrounding circumstances. The first is the lack of the expression that the testator intended to confer a bounty upon his son exclusively. In our opinion, there is no presumption in law that when a father allots his self-acquired properties among his sons, the sons take their shares as ancestral property. The lack of expression is not indicative either way. The next contention is that the will was intended to deflect the succession under the Hindu Succession Act, as the testator must have an obsession to its provision. It may be true and it is for this reason that the testator dispose of his property under a will and chooses to benefit those he desired. No desire is expressed for the devolution of the properties for the benefit of the two sons and their families.
9. The next submission is that there was a semblance to the partition of the properties belonging to the HUF as the two sons have been allotted shares equally. This may be a circumstance but in the overall attending circumstances, it loses much importance. The counsel then urges that though it is the donor's intention and not that of the donees which determines the nature of the gift, the donee's attitude may shed some light which may help in understanding the donor's intention and the precise character of the gift. The counsel states that the two sons including the assessed had described the properties in the wealth-tax return as belonging to the branch of the family of the assessed. Reliance is placed on CIT v. Krishna Bans Bahadur : 96ITR714(Delhi) . No doubt, in that case decided by a Bench of this court, the attitude of the assessed himself was taken note of. It may assume some importance when the conduct of the assessed becomes relevant. The law laid down by the Supreme Court is clear that what is to be gathered from a document and the surrounding circumstances is the intention of the testator or donor regarding the kind of interest which his sons are to take in the property devised or gifted to them. The counsel lastly contents that the pattern of behavior of the testator was adjudged by the Tribunal and it came to one view, which was possible, and then this court should not substitute its view. In our opinion, the construction of a document of title is a pure question of law and a true construction has to be adopted.
10. We are unable to accept the submission of the counsel for the assessed. These contentions are not borne out from the legal consequences of the provisions of the will. Taking the document as a whole and all the relevant facts into consideration, it cannot be said that the testator intended that the bequest was an integral part of a scheme of partition and what was given to the sons was really the share of the property which would normally be allotted to him or them and in his or their branch of the family on partition. The testator asserts his absolute right to dispose of the properties. The testator does not treat his self-acquired properties as ancestral properties and then proceed to allot to his sons and their families as a in partition. In the will, the testator is conscious of the fact that he is possessed of the properties detailed therein and shall remain their owner till his death. Then, the testator mentions his family as consisting of his wife, the two sons and four daughters. There is an absence of the mention of the grandson or grandsons as forming part of the family headed respectively by the two sons. The testator then considered it advisable to make a will for the disposal of the property after his death. The disposal suggests the settlement of the self-acquired properties. The testator then appoints his sons as executors and trustees of the will. The appointment of the executors is to administer the properties according to the will by which bequests are made to two daughters of the amount stated in the will and Rs. 5,000 to each of the grand-daughters to be spent on their marriages. Arrangements are made for the wife. In respect of these obligations the testator directed them to be discharged from and out of the entire property bequeathed. Only the remainder is divided between the two sons. The appointment of the executors and trustees is an indication that the residue allotted to the two sons was not in the scheme of partition but a bequest. The testator bequeathed the property in the manner described by him in the various clauses of the will including clause 7. He directed that the rest of the property shall be shared equally by his two sons. It cannot be that the intention of the testator was to divide his remaining property as in a partition and to allow his two sons equally for themselves and as representing their branch of the family. The words of the allotment of the rest of the property, movable and immovable, to 'be shared equally by the two sons, Shambhooram and Vishwanath' clearly point to an intention on the part of the testator to make it absolute and exclusive to the sons to the extent of their share. The words 'whatsoever and whosesoever' are not merely in consonance with the scheme of partition, but go equally to the disposal of the property, absolutely, of the testator at the time of his demise. On a careful construction of the document as a whole, we feel that there is no indication of the intention of the testator that the property shared by the two sons equally be taken by them as ancestral property in their hands. We feel that the Tribunal did not come to a correct construction of law on the will.
11. The reference is answered in favor of the Revenue and against the assessed. On the facts and circumstances of the case, we make no order as to costs.