RAMANUJAM J., - The following question has been referred to this court at the instance of the revenue :
'Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in excluding the income from property from the total income from the income-tax assessment for the assessment year 1962-63 and the value of this property for wealth-tax purposes for the assessment years 1962-63 and 1963-64 and another under the Income-tax Act for the assessment year 1962-63 and 1963-64 respectively?'
As is clear from the above question the reference arises out of there order of the Tribunal two under the Wealth-tax Act for the assessment year 1962-63 and 1963-64 and another under the Income-tax Act for the assessment year 1962-63.
The assessee was the owner of a house property No. 189-191, Ramnad Road, Madurai. He executed a will on 6th March, 1961. The house property is referred to in that will in the following manner :
'As regards the house property bearing No. 189-191, Ramnad Raod, Madurai it is my desire that this property should belong to the Hindu undivided family of which I am the karta the other coparceners being my sons. I have no separate interest over the property except as that of a Hindu undivided family. On may death my wife shall have the right of occupation of the property during her lifetime as a member of my family and after her death my interest in the property shall devolve on my sons in equal shares.'
Under the will the assessee has reserved the power to vary the terms of the will in respect of his individual assets. It was contended by the assessee that for house property should be taken to belong to the Hindu undivided family. But the Income-tax Officer as well as the Wealth-tax Officer rejected the assessees contention holding that the assessee has merely expressed a desire to impress the house property with the character of joint family property that such desire will be effective only after the lifetime of the assessee and that the assessee being alive it should be taken that the property is his own and not of the Hindu undivided family. Therefore they completed the assessment under the Income-tax Act as well as the Wealth-tax Act on the basis that the house property belonged to the assessee in the relative assessment years. The view taken by the assessing authorities was confirmed by the appellate authorities functioning under the Income-tax Act as well as the Wealth-tax Act. The assessments ultimately came before the Tribunal. The Tribunal took the view that though the intention to impress the property with the character of a joint family property was disclosed by the assessee in the will which can come into operation only on the death of the assessee still the declaration of such intention made by the assessee in the will can be taken to impress the property in question with the character of the property of the joint Hindu family. The Tribunal therefore disagreed with the view of the departmental authorities that the desire expressed by the assessee and the other statements made in the will by the assessee will not be taken to be effective as on the date of the will to impress the house property with the character of joint family property on that date by the wording he has used character of joint family property on that date by the wording he has used in the will. The reasoning of the Tribunal can be stated in their own words :
'In the present case, when we take note of the writing in the document which pertains to the property in question it is seen that the assessee had expressed clearly that the property in question should belong to the Hindu undivided family of which he was the karta other coparceners being his sons. He has further stated that he had no separate interest over this property except as that of a Hindu undivided family. This clearly indicates what his intention was that it was to treat the property in question as the property of the Hindu undivided family of which he was the karta. When that is the intention of the assessee conveyed by the above sentences in the will it cannot be said that it was the assessees intention to make it joint family a property after his death.'
It is contended before us by the revenue that the will itself can come into effect only on the death of the assessee that whatever desire he has expressed in the will can only be effective on his death, and that therefore during the assessment year the house property cannot be taken to be the property of the Hindu undivided family. It is further contended that even on the terms of the will it cannot be said that the assessee has impressed the house property with the character of joint family property as on the date of the will and that some of the other clause in the dealing with the right of residence of the assessees wife in the house property appear to be inconsistent with the house property being the joint family property.
But we are of the view that the Tribunal has come to the right conclusion in this case. The mere fact that the statement or declaration of the assessee is contained in a document styled as a will the effect of the statement or declaration cannot be ignored or overlooked for finding out the actual intention of the assessee. If the intention of the assessee is to treat his property as joint family property in future which is clear from the statements made by the assessee it has to be given effect to and the property has to be treated as having been impressed with the character of joint family property. Though the learned counsel for the revenue may be right in his statement that the will can come into operation only on the death of the assessee and whatever dispositions that have been made in the will can be treated to be effective only from such date, we are not inclined to agree with him when he says that the effect of the statements can be considered only as on the death of the assessee. In this case we are not concerned as to when the will comes into force. But we are only concerned with the legal effect of certain statements made by the assessee in the will. It is to be seen whether the assessees intention to treat the house property as joint family property has been made clear in the will. The mere fact that the statement is contained in a will cannot take away its legal effect and it cannot be disputed that even if the document fails as a will still the statements contained therein will have the evidentiary value for other collateral purposes. We are not therefore inclined to ignore the statements contained in the will merely on the ground that the will cannot come into force during the lifetime of the assessee. As regards the contention of the learned counsel for the revenue that the assessee has merely expressed a desire to treat the property as the property of the joint Hindu family and that he has not in fact impressed the house property with the character of joint family property by making a clear and unequivocal statement it is seen though the assessee starts by saying that it is his desire that the house property should belong to the Hindu undivided family of which he is the karta later he makes his intention clear by saying that he has no separate interest over the said property except as that of a Hindu undivided family. This subsequent sentence in our view makes the assessees intention clear that he treated the house property as the property of the Hindu undivided family thereafter by disclaiming any separate interest in relation to the house property. The subsequent clause under which the assessee has stated that his wife will have a right of occupation in the house during her lifetime does not in our view run counter to the clear intention of the assessee expressed already. It may be that the assessee wanted to make it clear that his wife in the event of his death will have a right of residence in the house as a member of the family along with other and the house property can be divided in equal shares between the coparceners only after her death. This shows that the assessee was anxious to see that his wife should not be driven out of the house immediately after the death of the assessee. This cannot be taken to show any inconsistency in the house property being joint family property from the date of the will.
In A. N. K. Rajamani Ammal v. Controller of Estate Duty, it has been laid down that when a coparcener throws his separate property into the common stock he makes no gift under Chapter VII of the Transfer of Property Act, that the two essential requisites for the conversion are - (1) the existence of coparcenary; and (2) the deliberate intention formed by the coparcener owing separate property to treat the same as joint family property, that such an intention may manifest itself in any form such as a statement in a deposition an affidavit execution of a document as a declaratory deed or by course of conduct. In this case the a assessee has clearly expressed an intention to treat his separate property as the joint family property in the course of execution of a will and the statements of the assessee which amount to a clear and unequivocal declaration can be acted upon as proof of the assessees intention even though the will may not have come into effect.
The result is that the question referred has to be answered in the affirmative and against the revenue. The revenue will pay the costs. Counsels fee Rs. 250.
Question answered in the affirmative.