Gopalan Nambiyar, C.J.
1. The Income-tax Appellate Tribunal, Cochin Bench, has referred the following questions of law for our determination:
'(1) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal is right in law in holding that the Cutchi Memons settled in Travancore area are governed by the rules of Hindu law not only on matters of succession and inheritance but also on other matters like property rights including joint family property, its distribution according to the rule of survivorship and the right of a son in it by birth ?
(2) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal is right in upholding the finding of the Appellate Assistant Commissioner that the transaction recorded in the document dated February 11, 1965, is only a partition and not a gift to the extent of the shares allotted to the two sons of the assessee '
2. The assessee is a Cutchi Memon settled in the former princely State of Travancore now part of the Kerala State. The statement of facts sent up by the Tribunal records as an undisputed fact that the Cutchi Memons of Travancore had migrated from Bombay many years ago. They are also rather small in number, being only 332 (according to the census report of Sri Subramanya Aiyar) in the whole State of Travancore. On February 11, 1965, the assessee executed a deed of partition with his three children, (two sons aged 55 and 42, and a daughter aged 46) in respect of certain properties. The transaction attracted the attention of the GTO, who took the view that the property belonged to the assessee individually, and the transaction was really a gift by the assessee to his children in the guise of a partition. The officer, therefore, issued notice to the assessee to furnish the gift-tax return. The assessee refused, and took up the position that he, as a Cutchi Memon settled in Travancore after migration from Bombay, was governed by the Hindu law, and as such it was his joint family property which had been partition. (sic) to the Hindu law. The GTO overruled the said contention and say at Cutchi Memons are governed by the Hindu law only in matters of inheritance and succession, and that in other matters they are governed by the Mohamedan law. He assessed the assessee,' overruling his objections. On appeal, the AAC reversed the decision, holding that in regard to the two sons, there was no gift but only a partition; but as regards the daughter there is a gift by the assessee and his two sons, which was liable to tax, and accordingly he made certain modifications in the valuation made by the ITO. The department appealed to the Tribunal against the finding that as regards the two sons, there was no gift by the assessee. The Tribunal held that the Cutchi Memons settled in Travancore are governed by the rules of Hindu law in all matters, and not merely in regard to inheritance and succession, and that the distribution of property was according to the rule of survivorship and the doctrine of right by birth. In that view it dismissed the department's appeal. The question of law was referred under Section 26(3) of the G.T. Act, 1958.
3. The law applicable to Cutchi Memons was recently surveyed exhaustively by the Supreme Court in CED v. Hajee Abdul Sattar Sait : 86ITR53(SC) and it was ruled that the Cutchi Memons who had settled down inMadras had regulated their affairs since they had settled down amongstHindus, according to the Hindu law not only in matters of succession andinheritance, but also in matters of their property including the Hindu coparcenary and survivorship. The Supreme Court referred to the earlierdecision in Hirbai v. Sonabee, Perry's Oriental Cases 110 (1853), regardingthe law applicable to Khojas and Cutchi Memons (case is referred to as theKhoja and Memon cases). It was held that the Khojas who settled down inCutch, Kathiawar and Bombay, were converted as a caste to Islam, but hadretained on their conversion the Hindu law as in inheritance and succession.As to Cutchi Memons also, it was held that they had originally settled downin Cutch from where they spread in Western India; that originally theytoo were converted to Islam ; and that they mad retained the Hindu law ofsuccession excluding females from inheritance. The development of thelaw was fully surveyed, and it was noted that from 1847 to 1905 theBombay High Court had consistently treated the Khojas as being governedby the rules of Hindu law in matters of property, succession and inheritance. In regard to Cutchi Memons, in an earlier case, Haji Ismail HajiAbdula's last Will and Testament, In re ILR  Bom 452, it was heldthat they were not to be regarded as Hindus for the purpose of the HinduWills Act. With the evolution of the law through judicial decisions, itbecame fairly well crystallised that the Cutchi Memons are governed bythe Hindu law only in matters of inheritance and succession. The positionwas thus summarised at p. 62 (of 86 ITR):
'The above analysis shows that, barring one or (sic) decisions, the general trend of judicial opinion in Bombay was (sic) the Khojas and the Cutchi Memons retained, despite their conversion, considerable portion of their personal law and that the rules, of Hindu law were accepted by them as customary law in matters of property, inheritance and succession, including rules as to joint family property, the right of a son therein by birth and the devolution thereof by survivorship.'
4. The Supreme Court then considered the question whether the view accepted by Bombay could be said to be the same in respect of Cutchi Memons settled in Madras and elsewhere. It was pointed out that the High Court of Madras had adopted a view different from the later trend of opinion in Bombay. Reference was made to the decision of Kumaraswamy Sastri J. in Siddick Hajee Aboo Bucker Sait v. Ebrahim Hajee Aboo Bucker Sait, AIR 1921 Mad 571. In that decision, after discussing the Bombay view, the learned judge had come to the conclusion that the Khojas and Cutchees had spread themselves from Cutch and Kathiawar which was their original settlement, to Hindu kingdoms, and generally mingled with Hindus in their surroundings and traditions, and thus imbibed the rules of Hindu law in general, not only in matters of succession and inheritance, but even in concepts such as joint family properties and devolution by survivorship. The decision was cited with approval in Abdul Sattar Ismail v. Abdul Hamid Sail, AIR 1944 Mad 504. After this analysis of the trend of the Madras decisions, the Supreme Court observed (p. 65 of 86 ITR) :
'It may, therefore, be taken for the time being that the view prevailing in that court is the one of Kumaraswamy Sastri J. in that decision. The records of past cases and the decisions of the High Court therein found by that learned judge as also the past proceedings filed in the High Court by the members of the respondents' family and orders passed thereon would seem to reinforce the reasoning and the conclusion arrived at by the learned judge, in that the parties in those proceedings would not have in filing those proceedings assumed that rules of Hindu law applied to them unless there was a prevailing understanding that that was their customary law. That it is the law laid down by the High Court of Madras which must apply and govern the Cutchi Memons settled there is clear from Begum Noorbanu v. Deputy Custodian-General of Evacuee Property, AIR 1975 SC 1937, where the Khojas settled in the former Hyderabad State were held to be governed by the law as laid down by the Privy Council of the then State of Hyderabad.'
5. The court then examined how the surroundings in which the Cutchees settled down affect the customary law to which they were accustomed till then, and pointed out that the question as to which customary law is applicable turas really on the consideration as to which law a community decides to have (sic) succession to the properties of its members, depending, that is (sic) upon the persons amongst whom they settled down, and the surroundings and traditions to be found in that place. Thus, it was pointed out that Cutchi Memons settled down among Mohamedans in Mbmbasa although they originally migrated from Sind, accepted the rules of Mahomedan law as their custom. Similarly, the Memons who had followed the Hindu law when they migrated to Porbandar, accepted Mohamedan law when they proceeded to Bombay and settled down among coreligionists. After noticing these decisions and trends, the Supreme Court stated (p. 68 of 86 ITR):
'The conclusion which we arrive at on consideration of the decisions referred to above is that the Cutchi Memens who proceeded either from Cutch or from Bombay to Madras and who, it appears, settled down amongst Hindus, Hindu surroundings and traditions there, regulated their affairs as regards their property, succession and inheritance according to the Hindu law, which they had retained while in Cutch, and to which they were already accustomed.'
6. To the principle thus stated by the Supreme Court must be added one other allied principle, viz., whether the migrating Cutchi Memons had imbibed the native traits and habits of the place where they settled. In Begum Noorbanu v. Deputy Custodian-General of Evacuee Property : AIR1965SC1937 , the Supreme Court observed (p. 1941):
'Mr. Agarwala faintly contended that all Khojas, wherever they may be, must be deemed to have migrated from the former State of Bombay. It is true that the largest number of Khojas are to be found in the former State of Bombay. But in the absence of evidence it is not possible to say that Khojas wherever they may be resident in India must be deemed to have migrated from that State. Moreover it is not disputed that large number of Khojas lived in that part of India which for some time was known as Saurashtra. It may as well be that Khojas living in other parts of India migrated from the Saurashtra area. There is nothing to show that those who lived in Saurashtra were by custom, governed by Hindu law. Apart from that even if the late Khan Bahadur or his ancestor had migrated to Hyderabad from an area in which they were governed by custom by Hindu law, after migration to Hyderabad State it was incompetent to them to plead a custom which is at variance with Mahomedan law. This question has been specifically decided in Jahandarunnissa Begum v. Mohd. Moinuddian, AIR 1953 Hyd 117, where it was pointed out as follows :
'This is the state of law so far as the former British Indian Courts are concerned. So far as this court is concerned, the then Judicial Committee has held in the case of Munwar Begum v. Najib Mirza, 7 Nazair Osmania 463, that any custom which is in direct contravention or in complete variation of any principle of Mohamedan law could not be proved. They held that it has not been stated in Sharai Shariff (Mohamedan law) that local or family custom would have preference over Sharai Shariff. They also held that such a custom could not be allowed to be proved unless such custom is allowed to be proved by enactment.' The Judicial Committee of the former State of Hyderabad was at the apex of the judiciary in that State and the law laid down by it must be deemed to have been the law of Hyderabad till the Shariat Act was extended to it. In the circumstances, therefore, we hold that the Khan Bahadur was incompetent to make a will and that consequently the property left by him must devolve on his heirs as if he had died intestate. '
7. That takes us to the question : What was the rule in the Travancore State, when the Cutchi Memons from Bombay migrated and settled down in that area This can be seen if we examine the decision in Hajee Kameesa Jacob Sait v. Haji Mohammed Kathrimbai 24 TLR 228. Sadasiva Aiyar C.J. in his judgment noticed at page 229 one of the contentions urged; that the Cutchi Memons who settled in Travancore had changed their personal law of inheritance and succession to accord with the Mohamedan, rather than the Hindu law. Adverting to this contention the learned Chief Justice exhaustively traced from page 231 the evolution of the law and stated his conclusion. After referring to the decision of Ranade J. of the Bombay High Court in Bai Baiji v. Bai Santok ILR  Bom 53, and of the Punjab High Court in 1958 P. W. R. 1907, the learned Chief Justice observed:
' ......It being, then, clear beyond doubt that Eassa's family followed the Hindu law and customs of succession and inheritance as prevailing in Bombay when the plaintiff's ancestor (presumably 2nd defendant's father) migrated to Travancore about 100 years before this suit, the burden of proving a change (by a new custom) to the Mohamedan law of inheritance and succession lies on 2nd defendant as decided by Ranade J. The 2nd defendant has accepted this view of the law in his written statement and also in the 2nd ground of appeal to this court, which says ' The custom relating to inheritance set up by the defendant has been amply proved in this case '.'
8. Thus, according to the Chief Justice, there was no proof of a change of law after migration. The other learned judge, Sankara Menon J., concurred with the Chief Justice. We extract the relevant passage.
' I concur. The two important questions in the case are :
(1) What is the law of inheritance to be applied to the Cutchi Memons resident in Travancore; and
(2) Whether by law or custom the re-marriage of a widow of the Cutchi Memon community divests her of her husband's estate ?
2. It being established by a series of decisions from 1877 downwards by the Bombay High Court that in the Bombay Presidency from where the Cutchi Memons come, the community is governed by the Hindu law, it may safely be held that that is the personal law of the community, and it lies strongly on those who assert that by custom members of that community who have come to Travancore have changed that personal law and have adopted the ordinary Mohomedan law, to prove the same. I agree with the learned Chief Justice that that evidence is wanting.'
9. The decision recognises that a change of the original law after migration is a matter of proof, the burden being on the party setting up a change of the original law, by custom or usage. In addition to the above judicial decisions, counsel for the revenue invited our attention to the passage in Mulla's Hindu Law, 14th edn., p. 617, as follows :
'582, Khojas and Cutchi Memons [The whole of this section is subject to the provisions of the Shariat Act, 1937]--(1). In the absence of proof of special usage to the contrary, Khojas and Cutchi Memons in the Bombay State are governed, in matters of inheritance and succession, by the Hindu law ; in other matters they are governed by the Mahomedan law. The only special usage opposed to the Hindu law of succession hitherto recognised is the usage of the Khojas according to which the mother is entitled to management of property and letters of administration in preference to the childless widow or sister of the deceased.'
10. In the light of the above discussion, we think that the view taken by the Tribunal cannot be sustained. We do not think that there is any warrant for holding that the. Cutchi Memon in this case was governed in all matters by the rules of the Hindu law. We rather think, having regard to his origin from Bombay, that the Hindu law applied to him only in matters of inheritance and succession ; and there is no proof of any custom or usage by which it became applicable to the assessee in matters other than these. The burden of proving this was on the assessee, and the said burden has not been discharged.
11. In the result, we answer the questions referred in the negative, i.e., in favour of the revenue and against the assessee. There will be no order as to costs.