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Goswami Maharaj Renchhodraiji Govindlalji Vs. Commissioner of Income-tax, Gujarat - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtGujarat High Court
Decided On
Case NumberIncome-tax Reference No 13 of 1963
Judge
Reported in(1965)0GLR1; [1964]54ITR664(Guj)
ActsEvidence Act - Sections 114; Indian Income-tax Act, 1922 - Sections 55
AppellantGoswami Maharaj Renchhodraiji Govindlalji
RespondentCommissioner of Income-tax, Gujarat
Appellant Advocate B.R. Shah, Adv.
Respondent Advocate J.M. Thakore, Adv. General
Cases ReferredAppalaswami v. Suryanarayanamurthi
Excerpt:
direct taxation - nature of income - section 114 of evidence act, 1872 and section 55 of indian income-tax act, 1922 - matter pertaining to amounts received by assessee as and by way of 'gurubhets' as holder of office during relevant assessment years - office held by assessee not acquired from properties of joint family - assessee succeeded to office on death of his father - office is hereditary governed by rule of succession as it passes from father to son - office does not pass by survivorship - office not ancestral or joint family property - income received as 'gurubhets' income derived from separate property not assessable in hands of hindu undivided family - said income personal income. - - (2) on november 29, 1956, when the undersigned was interrogated by you, the said fact was.....shelat, c.j.1. this reference relates to two assessment years 1957-1958 and 1958-1959 and the dispute is as regard two sums of rs. 14,923, and rs. 18,966 received by the assessee as and by way of the 'gurubhets' during the two relative previous years respectively and included in his assessments for these two years. 2. the assessee is one of the direct descendants of shri vallabhacharya who founded the vallabh sampradaya or what is otherwise known as punshtimarg and which has considerable following in this part of the country as such. he is one of the sampradaya, has several properties and resides at porbandar. unlike the heads of some other sects, he leads the life of a grahastha, has a wife, a son and three daughters. as found by the income-tax officer, the office he holds is a.....
Judgment:

Shelat, C.J.

1. This reference relates to two assessment years 1957-1958 and 1958-1959 and the dispute is as regard two sums of Rs. 14,923, and Rs. 18,966 received by the assessee as and by way of the 'Gurubhets' during the two relative previous years respectively and included in his assessments for these two years.

2. The assessee is one of the direct descendants of Shri Vallabhacharya who founded the Vallabh Sampradaya or what is otherwise known as Punshtimarg and which has considerable following in this part of the country as such. He is one of the Sampradaya, has several properties and resides at Porbandar. Unlike the heads of some other sects, he leads the life of a Grahastha, has a wife, a son and three daughters. As found by the Income-tax Officer, the office he holds is a hereditary one and he would, therefore, be succeeded by his son or sons, as the case may be. At Porbandar, he keeps and maintains an idol of Lord Krishna in his house. As a result of the decision in Maharaj Shri Govindlalji Ranchhodlalji v. Commissioner of Income-tax, it is now beyond the pale of any controversy that offerings made by the devotes of this sampradaya at from time to time are made not to the idol but to the assessee and these offerings are generally made at the time of prayers. As the head of the Sampradaya at Porbandar and by virtue of the office he holds, he has to perform certain duties and obligations and he is looked upon as Guru by his followers to whom he gives Samarpan and Nivedan Mantras. No one can in fact be said to be his flowers unless he has been initiated by the assessee, and such initiation ceremony consists in the assessed reciting certain Mantras.

3. At one time, the assesee contended that the offerings knows as 'Gurubhets' were made to him out of the personl regard that his follwers have for him and not as the head of the Sampradaya at probandar That controversy, as we have observed, is now set at rest by the aforesaid decision reported in [1958] 34 I.T.R. 92. by the High Court of Bombay. whereby it is concluded that these offerings are made to him, not out of personal regard for him as a particular individual, but because of his being the head of the sect and as the holder of that office. There is, therefore, no longer any dispute regarding the taxability of these amounts received by the assessee as 'Gurubhets'.

4. Until the assessment years 1956-57, the assessee was being assessed in respect of all his income, including the income by way of 'Gurubhets' in the statues of an individual, Even in his returns for the assessments year 1957-1958, he had first claimed to be assessed in the statues of an individual. By his letter dated September 8, 1958, addressed to the Income-tax Officer, Porbandar Circle, the assessee asserted that, though in these returns he had shown his status as an individual, his status should be taken to be that of a Hindu undivided family for the reasons therein set out. The reasons stated by him in that were as follows :

(1) The properties held by the undersigned are ancestral properties received by him on partition effected by consent decree passed in Ordinary Original Civil Suit No. 194 of 1935 on November 5,1938, by the Bombay High Court.

(2) On November 29, 1956, when the undersigned was interrogated by you, the said fact was stated by him very clearly.

(3) The Income-tax Appellate Tribunal, in I.T.A.No. 1360 of 1955-56, assessment of 1953-54, has approvingly observed in paragraph 5 that the property which his father held was divided on his death.'

5. The reason for writing this letter for the change of status was, according to Mr. Shah, that his son was born on Vaishakh Sudi 7, Samvat Year 2011, (April 28,1955) who would take interest on his birth in the properties received by the assessee as a result of the consent decree referred to in the said letter. Until then, though these properties were joint family properties, he had treated the income arising therefrom as his separate income and had, therefore, claimed to be assessed in the status of an individual as he was till them the sole surviving coparcener. This change in the position was accepted by the Income-tax Officer and in appeal by the Appellate Assistant Commissioner as also by the Tribunal.

6. Before the Income-tax Officer, however, the assessee took up the contention that while the income from the properties received by him as a result of the said consent decree could be assessed on the footing of its being the income of the Hindu undivided family and he being the Karta thereof, so far as the income as and by way of 'Gurubhets' was concerned that income should be treated as his separate income and he should be assessed in respect thereof in his status as an individual. The Income-tax Officer rejected this contention and held that 'Gurubhets' were taxable in the hands of the Hindu undivided family. In so holding, the Income-tax Officer observed as follows :

'The gifts are made to him because he is the head of his sect. Further, the office held by him is hereditary. I, therefore, hold that whatever gifts he received as 'Gurubhets' are received by him as holder of the said office and are not received in the capacity of a particular individual holding that office. The office as already stated is hereditary and he is succeeded by his son or sons. His properties as well as any savings of his are divisible amongst his sons. Whatever income he, therefore, earns or receives ia earned or received by him in the capacity of the karta of the Hindu undivided family which holds that office. Assessee's conduct also does not show otherwise. He puts all the income whether from house properties or from 'Gurubhets' in a common stock and the whole expenditure of the Hindu undivided family is met out of the common stock. The status is therefore taken as Hindu undivided family.'

7. In an appeal by the assessee against this order, the assessee raised the same contentions and the Assistant Commissioner rejected them on the same grounds as given by the Income-tax Officer. The Tribunal also upheld the order passed by the Income-tax Officer and confirmed by the Assistant Commissioner and relying on the observations made by the High Court of Bombay in Maharaj Shri Govindlalji Ranchhodlalji v. Commissioner of Income-tax and after holding on the basis of those observations that the 'Gurubhets' were taxable income, the Tribunal observed :

'Thus it is clear that the income is received by the assesee not because the presents are made to him out of personal regard, but because he is the holder of the office. As the Income-tax Officer has pointed out further, the office is hereditary and the property of the holder of the office is succeeded to by survivorship by the member of the Hindu undivided family. Therefore, it is difficult to see how 'Gurubhets' can be considered as the personal income of the assessee which becomes his personal property. We are of the opinion that on the facts admitted and not in dispute, as pointed out earlier, the income must be held to have been received by the assessee not as an individual but as the karta of the Hindu undivided family holding the office of the head of the faith at the given point of time. Further, the Income-tax Officer has also found as a fact that the assessee does not make any distinction between the income earned by him, by way of 'Gurubhets' and the other income admittedly earned by the Hindu undivided family of which he is the karta. Then again, all the income of the Hindu undivided family and the income from 'Gurubhets' which the assessee claims as his individual income, a re both intermingled and put into a common hotchpot from out of which the expenditure of the Hindu undivided family is met. Therefore, the assessee's submission that 'Gurubhets' are his personal income cannot for this reason also be accepted. We would accordingly uphold the addition of the two amounts in the assessments made on the assessee in the status of the Hindu undivided family.' :

The Tribunal thus upheld the order passed by the Income-tax Officer on the ground that the 'Gurubhets' must be held to have been received by the assessee as the karta of the Hindu undivided family and, secondly, that the assessee himself had not made any distinction between the income earned by him by way of 'Gurubhets' and the other income derived from the properties received by him as a result of the said consent decree, which were the properties admittedly belonging to the joint family of which he was the karta.

8. It is clear from these orders (1) that as found by the Tribunal, the office held by the assessee as the head of the Sampradaya at Porbandar is hereditary, in other words, it passes from father to son or sons, as the case may be, (2) that on his own assertion in his letter to the Income-tax Officer dated September 8, 1958, the properties held by the assessee are ancestral properties decree as they were received by him on partition effected by the said consent decree dated 5 November, 1938, and (3) that he holds these properties and receives the income therefrom as the karta of the Hindu undivided family and on is death, they would devolve on his sons by survivorship. It has also been found as a fact, both by the Income-tax Officer as also the Tribunal, that the entire income received by him, both from the properties which he got as a result of the said consent decree and the 'Gurubhets' is entered into and credited in the same books of account and is utilised for the expenditure of the Hindu undivided family. There can be no doubt, and in fact it is admitted by the assessee, that the properties at Porbandar which he received as a result of the said consent decree, are coparcenary properties held by him as the karta of the said joint family and consequently, the income arising therefrom would be the income of the Hindu undivided family. But the question raised before us is whether the office, though hereditary as held by the Income-tax us is whether the office, also the joint family property and the income therefrom is the income of the said joint family.

9. It is conceded by Mr. Shah and it is a well-settled position that the office held by the assesee as the head of the sect is property. The concurrent finding of all the authorities below is that this office is hereditary, i.e. that it is succeeded from father to son or sons, as the case may be. The Income-tax Officer has in fact clearly found as a fact that the office would be succeeded by all the sons if the holder thereof for the time being leaves surviving him more than one son. There is no founding, and in fact it is nobody's case, that succession in respect of this office at Porbandar is governed by any rule of primogeniture. Therefore, if the head of his sect were to leave more than one son surviving him, it would not be as if the eldest son alone would succeed him, but all the sons would be entitled to become the heads and to hold the office. The point to consider, therefore, is, what exactly is the effect of the finding that the office is hereditary so far as the 'Gurubhets' are concerned

10. An office which is hereditary would ordinarily be understood to mean that it is one the right of succession to which would descend on the death of the holder thereof for the time being in accordance with the law of inheritance applicable thereto. Such a right to succeed may be in favour of his blood relations or from the Guru to his disciple. But there is no finding either by the Income-tax Officer or by the Assistant Commissioner or by the Tribunal that the office is hereditary by reason of operation of law or by reason of any constitution governing this sect. That being the position, when it is said that the office is hereditary, what is to be understood to mean by that finding is that a son would succeed to his father in this office by reason of the fact such a son would be the direct descendant of the founder of the Vallabh Sampradaya and would naturally be the person who would be looked upon as the head of the Sampradaya Porbandar by those holding faith in the Sampradaya and such persons would turn to him as such a head for initiation and to give offerings namely, 'Gurubhets'. Therefore, on the death of a father, his son or sons would succeed him as the hear or heads of the Sampradaya at Porbandar by reason of such son or sons being the direct descendants of the founder of the Sampradaya and would perform the duties and enjoy the rights attached to the office. Each of such sons, therefore, would discharge the functions as the head, would perform initiation ceremony and have his own followers and receives.'Gurubhets' which, as the expression connotes, are nothing else but offerings to a Guru.

11. The fact that the office is hereditary as found by the Tribunal, therefore, namely, determines the rule of succession thereto, i.e.from father to son or sons, as the case may be, and not by nomination or election, as it happens in some other sects. But merely because succession to this office is from father to son would not necessarily mean that the office is the property of a joint and undivided Hindu family. The reason is fairly clear because, as in the case of coparcenary property, a son does not get any interest in that office by reason of his birth. There is in fact no such finding by the Tribunal. On the other hand, since the finding is that the office is hereditary, it indicates that a son or sons, as the case may be, would acquire interest in the office only upon the death of the father and not on the birth of such a son, as would be the case if the office were the property of the Hindu undivided family. There is also no finding that the right to succeed is governed by any of rule of survivorship. Until, therefore, the death of the father and except for the right to succeed him as the head on account of the office being hereditary a son during the lifetime of his father would have no tight to interest in the office or in the income derived from such office. Furthermore. there is no finding by the Tribunal that the assessee holds the office on behalf of the family or that the office is property belonging to the joint family. The conclusion of the Tribunal that the assessee holds the office on behalf as the karta of the family is at best a legal inference drawer by the Tribunal from the mere fact that the office is hereditary, and from the conduct of the assessee relied upon by the Tribunal in what it calls intermingling of the income received as 'Gurubhets' with the income derived from the properties received by the assessee as a result of said consent decree. That conclusion, in our view, would not be justifiable from the mere fact that succession to the office is from father to son. The office, therefore, is a separate property of the holder of the office for, the time being. The functions and obligations attached to the office the Hindu undivided family nor can it be said that the assessee holds the office as the karta of a joint and undivided Hindu family.

12. If we are right in this part of the case, the office as the head of the Sampradaya at Porbandar would be the separate property of the assessee as the holder of the office for the time being and the income derived from such office would be his separate income notwithstanding the fact that the family and manages it properties. It is quite consistent in Hindu law for a member of a coparcenary to have separate property, and there is no presumption that if such a coparcener has his own property, such property is the joint family property. The Tribunal as also the department have relied upon the fact that the assessee maintained one set of books in which both the income of the ancestral properties received by him under the said consent decree as also the income received by him as and by way of 'Gurubhets' were brought in and credited. Reliance was also placed on the fact that both these incomes were utilised by the assessee for the purposes of the joint family and the maintenance of its members. The finding arrived at by the Tribunal was that was the income derived from the office as the head of the Sampradaya was intermingled with the income of the properties of the joint family, the assessee had not only brought the income into the hotchpot but he must be said to have held the office as the karta of the Hindu undivided family.

13. Now, the rule in Hindu law regarding property thrown into the common stock is that property which was originally separate or self-acquired property of a member of a joint family may become joint family property, it if has been voluntarily thrown by him into the common stock with the intention of abandoning all separate claims upon it. A clear intention to waive his separate right must be established and it will not be inferred from the mere fact of his allowing the other members of the family to use it conjointly with himself nor from the fact that the income of the separate property was used to support a son, nor from the mere failure of a member to keep separate accounts of his earning. So also, acts of generosity or kindness should not be construed as admissions of legal obligation. Separate property thrown into common stock is subject to all the incidents of joint family property. Similarly, where the members of a joint family, who have control the joint estate, blend with that estate property in which they have separate interests, the effect is that all the property so blended becomes joint family property. The rule, therefore, requires that the separate property of a coparcener must be voluntarily thrown into the common stock, that there must be a clear intention of the abandoning all claims upon such property, that the mere fact that the property is allowed to be enjoyed conjointly by the other members of the family, or the fact that the income thereof was expended on the maintenance of a son, or that separate account of such income was not kept, would not be sufficient to justify the conclusion that the property was thrown into the common stock. This position has been well clarified in Narayanaswami Mudaliar v. Ratnasabapathy Mudaliar, where Varadachariar and Horwill JJ. observed that Hindu law no doubt recognises 'blending' and attaches to such blending certain legal consequences. But there is no persumption in favour of 'blending'. The presumption, if any, can only be one of fact to be drawn in the light of all the surroundings circumstances and in accordance with what is described in Section 114 of the Evidence Act - Section 114, as the common course of human conduct. They also observed that the property which was originally the separate self-acquired property of a member of a Hindu joint family might become joint family property if it had been thrown by him into the common stock with the intention of abandoning all separate claims upon it. The onus would be on the person who pleaded that such separate property of a member of a joint Hindu family had at some later stage ceased to be so, to establish that it had been so dealt with as to lose its separate character. The learned judges also emphasized that the mere circumstances that it was not known how the separate income of the member and the income from the ancestral property were dealt with by the member of the Joint Hindu family could not be a ground on which it could be held that the properties were not his separate properties, and to hold that because of that fact he must be presumption to have mingled the two incomes so as to lose his right over his own earnings would amount to practically throwing the onus on the wrong person. Mr. Shah also relied upon Commissioner of Income-tax v. S. N. N. Sankaralinga Iyer, in support of his contention that the income received by the assessee as 'Gurubhets' should be held as his separate income. In that case, the assessment was made on the basis that the family, of which the assessee was the karta, was an undivided Hindu family. For the assessment year 1943-44. the assessee claimed that the remuneration of Rs. 18,991 which he received as the managing director of bank, and the sum of Rs. 105, which he received as director's sitting fees, were his personal earning and not property belonging to the undivided Hindu family of which he was the manager. The only circumstances relied on by the revenue to declare these two amounts family property was that in order to acquire the qualification for a managing director, the assessee had utilised family funds and purchased certain shares, and as the qualification was acquired by utilising the family funds, it was claimed that his remuneration earned as managing director and director's sitting fees must be treated as joint family property. The High Court held that the remuneration of the managing director was earned by the assessee in consideration of services which he rendered to the bank. It was found that no part of the family funds was spent or utilised for, acquiring this remuneration except that the necessary shares to acquire the qualification of a managing director were purchased out of joint family funds, but there was no detriment to the family property in any manner or to any extent, as admittedly the shares earned dividend which was included in the income of the family. The High Court further held that under Hindu law, the remuneration of the managing director whose employment was in the nature of a contract of service would ordinarily be his self-acquisition and unless the earnings were thrown into the common stock or, in other words, blended with the family property, they would not become family property, as that by itself would not constitute blending under Hindu law, as it required the throwing of the income into the common stock with the intention of abandoning the ownership and vesting it in the family. It was true that the shares were purchased out of the joint family funds and were shown as held by the assessee in his own right. But the High Court held that it was impossible to infer from that fact that the appointment itself was on behalf of and for the benefit of the joint family or, in other words, that he was the managing director as representing the undivided family. From this decision, Mr. Shah, argued that the same reasoning must be applied to the facts of the present case and that as the duties and obligations to be performed by the assessee as the head of the said Sampradaya at porbandar were of a personal nature, the office of the head of the Sampradaya held by the assessee must be held to be his separate property and the income derived therefrom as and by way of 'Gurubhets' must also be held to be his separate income and, therefore, would be assessable in his status as an individual.

14. The learned Advocate-General, however, pointed out that in Commissioner of Income-tax v. Kalu Babu Lal Chand the Supreme Court has explained this decision and has observed that the dictum laid down in Sankaralinga Iyer's case, depeded upon the facts and circumstance of that case. In kalu Babu Lal Chand's case, the Supreme Court held that the remuneration earned by the assessee as the managing director was, as between him and the Hindu undivided family of which he was the karta, the income of the family, and should be assessed in the hands of the Hindu undivided family. The facts, however, in the case before the Supreme Court were different from those in Sankaralinga Iyer's case. In the case before the Supreme Court, R, the karta of a Hindu undivided family, was one of the promoters of a company to be floated who took over a business as a going concern and carried on the business on behalf of the company until it was incorporated in December, 1930, The articles of association of the company provide that R would be the first managing director, specified his remuneration and required the company to enter into an agreement with R. The agreement, however, was not actually entered into until January, 1934.

15. The Appellate Tribunal found that the shares held in the name of R and his brother were acquired with funds belonging to the joint family and the family was in enjoyment of the dividends paid on those shares. Further, the company was floated with funds provided by the family and R made no contribution in this respect. The company also was all along financed by the family. Prior to the accounting year relevant to the assessment year 1943-44, the managing director's remuneration received by R was credited in the books of the family. In the assessment year 1943-44, it was claimed for the first time that the whole of the managing director's remuneration constituted the personal earnings of R and should not be added to the income of the family. It was on these facts that the Supreme Court held that the remuneration received by R as as the managing director was the income of the family and should, therefore, be assessed in the hands of the Hindu undivided family. The facts in this case thus were obviously different from those in Sankaralinga Iyer's case and inasmuch as in this case, not only the shares held in the name of R and his brother were acquired from funds belonging to the joint family, but there were the further facts that the company was floated with funds provided by the family and all along the company was actually financed by the family. It was, therefore, not surprising that the supreme court came to the conclusion that the remuneration in question should be treated as the income of the family and should be so assessed. Certain observation made by Viswanatha Sastry J. in Sankaralinga Iyer's case, no doubt, have been explained and doubts regarding them have been expressed by the the Supreme Court at pages 129 and 130 of the report. But these observations do not in any way reverse or take away the efficacy of the conclusion arrived at the learned judges in aforesaid case. The mere fact, therefore, that the income was entered in the family accounts and no discrimination was made in such accounts between the income earned from the separate property of the assessee and the income derived from the properties belonging to the joint family would not, therefore, by itself mean that there was such intermingling of the two incomes that a conclusion can be drawn from it that the separate property of the assessee was brought into the hotchpot with the intention of abandoning his rights thereto. The fact also that income was spent by the assessee for the maintenance of his family members or the fact that he failed to keep a separate account and credited the 'Gurubhets' in the family accounts would not be sufficient without any additional evidence to draw an inference that the income derived from the office as and by way of 'Gurubhets' was thrown into the hotchpot or the common stock. There is no such additional evidence relied on by the Tribunal. On the contrary, there was evidence in the opposite direction. The assessee had two kinds of income : (1) from properties admittedly ancestral and belonging to the joint family, and (2) from 'Gurubhets'. The stand taken by him until March 13, 1958, when the judgment in Maharaj Shri Govindlaji Ranchhodlalji v. Commissioner of Income-tax was delivered, was that these 'Gurubhets' were not taxable income. As already pointed out, that stand was negatived by the High Court and this income was held to be taxable. As pointed out, until September 8, 1958, the assessee had filed his returns in the status of an individual. That he did so in the belief, rightly or wrongly held by him, that as he had no son until April 28, 1955, and, therefore, being the sole surviving coparcener, the properties received by him under the said decree were his separate properties and the income derived therefrom was his separate income. He continued to maintain this position until September 8, 1958, though a son was born to him in April, 1955, and even when he filed returns for the assessment year 1957-58. It seems that he realised the changed position in consequence of the birth of his son and, therefore, wrote that letter stating that he should be assessed in the status of a Hindu undivided family giving in that letter the ground, namely, that the properties which he got as a result of the said decree would be ancestral property in his hands. It must, however, be observed that there is nothing in this letter to show that he wished to be assessed in the status of a Hindu undivided family in so far as the income by way of 'Gurubhets' was concerned. The contents of the letter show that it was confined to the incoem from properties. Therefore, there would be nothing to show that when he wrote this letter he expressed an intention or desire to treat 'Gurubhets' as the property of the Hindu undivided family. Nor can it be said that because he treated the income from both sources as his individual income in the previous years, he had intermingled properties and his office, much less that he had abandoned his rights to the office as the head of the Sampradaya at Porbandar as his separate property. There was in fact nothing surprising in that he allowed himself to be assessed in the status of an individual so far, for, until the birth of his son in April, 1955, he was admittedly the sole surviving coparcener. In Commissioner of Income-tax v. A. P. Swamy Gomedalli, their Lordships of the Privy Council in fact held, following their earlier decision in Kalyanji Vithaldas v. Commissioner of Income-tax, that the income received by right of survivorship by the sole surviving male member of a Hindu undivided family could be taxed in the hands of such male member as his own individual income for the purposes of assessment to super-tax under section 55 of the Indian Income-tax Act, 1922 - Section 55. In the earlier case, Kalyanji Vithaldas v. Commissioner of Income-tax, dealing with the case of two persons, namely, Kanji and Sewdas, the Privy Council had held that neither of these two individuals had son but, in the case of each, his interest in the firm was obtained by gift from his father, Moolji. Without deciding the question whether such interest was ancestral property or not, their Lordships assumed that their interest was ancestral property, so that if either had a son, the son would have taken an interest therein by birth, and on that assumption observed the as no son was born to either of them, no such interest had arisen to qualify or diminish the interest given by Moolji to Kanji and to Sewdas. They also held that the existence of a wife, or of a wife and daughter, did not make that income the income of the Hindu undivided family, and further observed that though a man's wife and daughter were entitled to be maintained by him out of his separate property as well as out of property in which he had a coparcenary interest, the mere existence of a wife or a daughter did not make ancestral property joint. They also observed that the word 'interest' was a word of wide and vague significance, and no doubt it might be used of a wife's or daughter's right to be maintained, which right accrued in the daughter's case on birth; but if the father's obligations were increased, his ownership was not divested, divided, or impaired by marriage or the birth of a daughter, and they finally held that that was equally true of ancestral property belonging to himself alone as of self-acquired property. On this reasoning, they held that the income in question, i.e., of Kanji and Sewdas, should not be treated as the income of the family or assessed as such. Such being the position, in respect of ancestral properties in the hands of a sole surviving coparcener, it is no wonder that the assessee had all along allowed himself to be assessed in the status as an individual. It is true that he continued to be so assessed until 1958, though his son was born in April, 1955, when he should have realised that the income from the ancestral properties should be assessed as the income of the Hindu undivided family. But a mere failure on his part to inform the department earlier of the change that had occurred on the birth of his son would not mean that he treated both the incomes in the same category or blended them as one. Such a conclusion would not be warranted because his case, until the decision in Maharaj Shri Govindlalji Ranchhodlalji v. Commissioner of Income-tax, was that his income by way of 'Gurubhets' was not even taxable.

16. It is well-settled that the burden of showing that there was blending of the two incomes and that that was done with the intention of abandoning the rights in the office as his separate property, was on the department. It is clear from the authorities cited above that the mere fact that the assessee did not maintain separate books of account for the 'Gurubhets' and credited them along with the other income in the same books of account was not sufficient to constitute abandonment of his rights. As already stated, he in fact treated both the incomes as his separate income because, until April, 1955, he was the sole surviving coparcener and, as held by the Privy Council, he could be assessed in the status of an individual.

17. Appreciating this position, the learned Advocate-General fairly conceded that the Tribunal had not approached the question in a proper perspective and that, on his part, he would not rely upon the question of the assessee having brought either the office or the income which he received as and by way of 'Gurubhets' into the common stock. He, however, contended that looked at from a proper perspective, the real question would be whether the Porbandar was in itself a joint family property, considering the fact that the rest of the properties held by him were, on his own admission, properties belonging to the joint family. He argued that, under Hindu law, if a joint family has property, the presumption is that that property is the joint family property, for the normal condition of property, according to Mitakshara law, is that the property is joint. In such a case, the burden of proof would be upon the person who wishes to assert that any part of the property belonged to him separately. He urged that, therefore, the burden was upon the assessee to establish that the office which he held and from which the income in question was derived was his separate property and separate income and, since the assessee had failed to adduce any evidence to show that he had acquired that office by any personal efforts on his part or that that property was his separate property, the burden was not discharged by him and, therefore, the office held by him as the head of the Sampradaya must be treated to be the property of the joint family and the Tribunal was, therefore, correct in holding that he held that office as the karta of the joint family. In support of his contention, the learned Advocate-General, relied upon Shrinivas Krishnarao Kango v. Narayan Devji Kango and in particular, the observations of the Privy Council in Appalaswami v. Suryanarayanamurthi cited there with approval. The law propounded by the Privy Council and approved by the Supreme Court was thus stated :

'The Hindu Law upon this aspect of the case is well settled. Proof of the existence of a joint family does not lead to the presumption that property held by any member of the family is joint, and the burden rests upon anyone asserting that any item of property is joint to establish the fact. But where it is established that the family possessed some joint property which from its nature and relative value may have formed the nucleus from which the property in question may have been acquired, the burden shifts to the party alleging self-acquisition to establish affirmatively that the property was acquired without the aid of the joint family property.'

18. From these observations, the learned Advocate-General contended that, since the joint family admittedly was possessed of properties belonging to it, if the assessee wanted to assert that the office held by him was his separate property, the burden would clearly be upon him to so establish. He also argued that in Hindu Law, if a father has separate property, when his son inherits that property that property becomes ancestral property in the hands of such a son. The assessee admittedly succeeded to his office on the death of his father. The office, will, according to the finding of the Income-tax Officer and confirmed by the Assistant Collector and the Tribunal, go to his son or sons upon his death, and, therefore, when the assessee such ceeded to the office on the death of his father, it become ancestral property in his hands and therefore, the income dirived from such office cannot be treated as his separate income derived by the from his separate property. The observations of the Privy Council relied upon by the learned Advocate-General and quoted with approval in the case of Shrinivas Krishnarao Kango would not, however, lead to the conclusion which he wishes us to reach. It is no doubt true that the assessee has received certain properties in consequences of the said consent decree and which properties admittedly are the properties belonging to the joint family. But the office held by the assessee was not acquired from those properties forming the nucleus of the joint family. The office held by the assessee in fact was succeeded to by him on the death of his father and the acquisition whereof did not involve in any manner the use of the ancestral properties. Therefore, there was no question of any acquisition of a separate property from any nucleus. As held by the Income-tax Officer and also by the Tribunal, the office is hereditary in the sense that it passes from father to son and does not pass by survivorship. That by itself would show that there is no question of the office being an ancestral or a joint family property. Besides, there is a clear distinction, according to the finding of the Income-tax Officer and accepted by the Assistant Commissioner and the Tribunal, between the office as the head of the sect at Porbandar, which is a subject-matter of succession as it is hereditary, and the other properties received by the assessee under the said decree which would devolve on his son or sons by survivorship. It is an admitted position that he succeeded to this office by reason of the fact, as found by the Tribunal, that the office is hereditary, in other words, governed by the rule of succession from father to son or sons as the case may be. The second contention urged by the learned Advocate General that the office as the head of the Sampradaya became ancestral property in the hands of the assessee when he succeeded his father to this office, also cannot be sustained because such a reasoning is contrary to the very finding arrived at by the Income-tax Officer and sustained by the Tribunal, namely, that the office is hereditary, which means that the rule of succession governing it is that it must pass from father to son, and not by any other rule, such as by survivorship. The finding that the office is hereditary, which is a finding of fact, is binding upon us and that finding, in our view, is contrary to the contention urged by the learned Advocate-General that it would become ancestral property in the hands of the assessee on his succeeding to that office on the death of his father.

19. For the reasons aforesaid We are of the view that the income received by the assessee as and by way of 'Gurubhets' was income derived him from his separate property and that, therefore, that income was not assessable in the hands of the Hindu undivided family. Our answer, therefore, to the question submitted to us will be that the 'Gurubhets' received by the assessee as the holder of the office are the personal income of the assessee and not the income of the Hindu undivided family of which he was the karta. The commissioner will pay to the assessee the costs of this reference.


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