Sudhindra Mohan Guha, J.
1. This application for reference under Section 27(1) of theW.T. Act, 1957, is at the instance of the CWT, West Bengal-III, Calcutta.
2. The assessee is an HUF. The assessment years are 1960-61 to 1968-69 and the relevant valuation dates are the last day of 2016 R.N. to 2024 R.N. respectively.
3. The original assessments for the assessment years 1960-61 to 1962-63 were completed on July 18, 1973, which, however, were set aside by the AAC. The karta of the assessee had received certain properties under the will dated May 4, 1958, of his father, Jaskaran Bhutoria, who died on February 12, 1960.
4. The assessee did not show the said properties in its wealth-tax returns for the years under reference as it was of the view that the said properties belonged to its karta in his individual capacity. The ITO, while completing the assessment under the I.T. Act, 1961, for the assessment year 1965-66, treated the said properties as that of the assessee. The ITO, reading the terms of the will, concluded that the property bequeathed by late Jaskaran Bhutoria was intended to be the separate property of the sons and not the ancestral properties in the hands of the sons as regards their male issues. He concluded that it was only an integral part of the scheme to partition his separate property amongst the heirs and, therefore, he assessed the income in the hands of the HUF.
5. Relying on the I.T. assessment order for the assessment year 1965-66, the WTO reopened the assessment for the assessment years 1960-61 to 1962-63, under reference, in order to include the value of the properties in the net wealth of the assessee. In the assessment orders for the assessment years 1960-61 to 1962-63 made under Section 16(3) read with Section 23 of the Act, the WTO included the value of the said property in the net wealth of the assessee.
6. Similarly, for the assessment years 1963-64 to 1968-69, the WTO, in his assessment order made under Section 16(3) of the Act included the value of the said property in the net wealth of the assessee. The WTO also included the value of the zamindary compensation receivable estimated at Rs. 45,000 in the net wealth in each of the years under reference.
7. On appeal, the AAC in his consolidated order dated October 19, 1972, confirmed the action of the WTO in respect of the inclusion of the value of the said properties received under the will.
8. Being aggrieved by the said decision of the AAC, the assessee came up in appeal before the Tribunal. As regards the properties inherited under the will, the Tribunal in its order dated December 12, 1973, held that they belonged to the karta in his individual capacity and did not belong to the assessee and, therefore, the value of such property was not liable to be included in the net wealth of the assessee. As regards the zamindary compensation, the Tribunal relying on the decision of the Calcutta High Court in the case of CWT v. U. C. Mahatab : 78ITR214(Cal) , was prima facie of the view that the same cannot be included in the net wealth of the assessee in each of the years under reference. However, it did not straightaway delete the zamindary compensation from the net wealth of the assessee but set aside the assessments on this point and directed the WTO to go into the matter afresh and ascertain the fact as te whether or not the compensation assessments roll had been published and whether or not the compensation, if any, payable to the assessee was ascertained for the years under reference.
9. From and out of the aforesaid order, the following common questions were referred to this court for its opinion :
'1. Whether, on the facts and in the circumstances of the case and on a correct interpretation of the last will and testament of late Jaskaran Bhutoria, the Tribunal was right in holding that the properties bequeathed by the said will and testament did not belong to the said HUF and the wealth represented by the said properties could not be assessed in the hands of the assessee-HUF ?
2. Whether, on the facts and circumstances of the case, the right to compensation under the West Bengal Estates Acquisition Act, 1953, constitutes an asset within the meaning of the Wealth-tax Act and especially in view of the fact where such compensation under the West Bengal Estates Acquisition Act has neither been determined nor paid ?'
10. Mr. Suhas Sen, learned counsel for the Revenue, argues that the intention of the testator has to be gathered from the will itself and there was no reason why the father should exclude his grandchildren from the will. It is also alternatively argued that the properties, even if they do not have the characteristic of ancestral property in the hands of the two brothers, they could thus acquire the characteristic of an HUF property.
11. Before entering into a discussion as to the law on the point, it is better to give the summary of the will, a copy of the English translation of which forms a part of the paper book (pp. 10 to 10(g)). The deceased testator stated initially that he and his brothers had inherited all the properties and money-lending business from their father. He and his brother separated and the properties had been partitioned. He had also partitioned the property, that is, amongst his two sons, in 1357 B.S. and they were maintaining their families from the income of the properties got by them on such partition. After such separation and partition, no other issues had been born to him. Besides his two sons, he had five daughters. He mentioned that the Hindu Succession Act had undergone various changes and his earnest desire was that, after his death, there being many co-sharers, the property may not be disrupted or destroyed. Four of his daughters had already been married. Regarding the marriage of his youngest daughter, he had made a provision by way of crediting an amount in her name in the khata. At the time of partition between himself and the sons, considerable sum had been paid to his wife and his father had also made a provision for his mother. He also left a sum of Rs. 30,000 received from an LIC policy to his wife and directed that Rs. 1,001 be paid to his mother as pranami. He also provided for Rs. 2,000 to each of the married daughters and Rs. 5,000 to his youngest daughter after her marriage. Then he mentioned that his sons were obedient and they were respectful to him and he directed that all his properties, movable and immovable, should be received by his sons, Jhumarmal and Sampatrai, on Nibttr Sattya, that is, with absolute and full right of disposal.
12. Reading the will as a whole and construing the meaning of Nibur Sattya, it is found by the Tribunal that the intention of the testator was clear that he wanted to confer an absolute right of disposal over these properties to his two sons. By this testament, the testator wanted the distribution of his properties in a way different from what would take place in the case of intestacy. Thus, it would appear that Jaskaran Bhutoria bequeathed the properties in his share to his two sons absolutely by the will referred to above. Now, it is to be seen whether a male Hindu governed by the Mitakshara branch of law can dispose of by a testament Ms interest in the coparcenary property.
13. The decision of the Allahabad High Court in the case of CIT v. Ram Rakshpal Ashok Kumar : 67ITR164(All) , may be referred to in this connection, though it was not a case of disposition of property under a testament. It was very relevant in view of the fact that the provisions of the Hindu Succession Act, 1956, had been considered by their Lordships in this judgment. In this case, one Durga Prasad and his son, Ram Rakshpal, and his grandson, Ashok Kumar, constituted an HUF until the October 11, 1948, when there was a partition in the family so that Durga Prasad separated. After that, Durga Prasad carried on his own business in the name of M/s. Murli Dhar Mathura Prasad until his death on March 20, 1958, and Ram Rakshpal and his son, Ashok Kumar, carried on their own separate business under the name and style of M/s. Ram Rakshpal Ashok Kumar, the assessee. Durga Prasad also left behind a widow, Jai Devi, and daughter, Vidyawati. Upon his death, Vidyawati took her one-third share of the property left by Durga Prasad, but his widow, Jai Devi, and his son, Ram Rakshpal, entered into a partnership for 2/3rds of the assets of the business known as Murli Dhar Mathura Prasad, which was, as already indicated, the separate business of Durga Prasad. A partnership was entered into between Jai Devi and Ram Rakshpal and its terms were incorporated in a deed which was duly registered on April 23, 1958. In the assessment year 1959-60, immediately following the death of Durga Prasad, a question arose whether the income from the one-third share, which had come to Ram Rakshpal from Durga Prasad, should be assessed as part of the income of the HUF of Ram Rakshpal Ashok Kumar, the assessee, or as the separate property of Ram Rakshpal. The ITO assessed it as the income of the HUF applying the well-recognised principle of Hindu law that the property left by the grandfather in the hands of the father was ancestral property in which the grandson had a right by birth. On appeal, the AAC maintained the decision of the ITO. But on a second appeal, the Appellate Tribunal allowed the appeal with regard to the income from the share inherited by Ram Rakshpal from Durga Prasad on the ground that it was the separate property of Ram Rakshpal which had devolved upon him by succession under Section 8 of the Hindu Succession Act. It was held that, until Ram Rakshpal himself decided to merge it with the property of the HUF of which he was the karta, it would continue to be his separate property. On a reference, it was held by the Allahabad High Court that in view of the provisions of the Hindu Succession Act, 1956, the income from assets inherited by a son from his father, from whom he has separated by partition, cannot be assessed as the income of the HUF of the son. Their Lordships, while interpreting Sections 6 and 8 of the Hindu Succession Act, observed as follows (p. 171) :
'Section 6 of the Act contains the extent to which sentiment in favour of the retention of the original Hindu law relating to succession to or devolution of the Mitakshara coparcenary property found legislative expression. It confines the operation of the original law of Mitakshara coparcenary property to cases where the deceased, governed by the Mitakshara law, had an interest in a Mitakshara coparcenary property and regulates only the devolution of such interest in that property. We do not think that any support can be sought from the provisions of Section 6 of the Act, in interpreting the very different provisions of Section 8 of the Act. The two sections deal with different subject-matter. One deals with the devolution of an 'interest' in a Mitakshara coparcenery property and the other with the devolution of 'property' itself of a male Hindu, falling outside the purview of Section 6 of the Act, upon the death of a male Hindu intestate.'
14. But these views were not accepted by the Gujarat High Court in its decision in the case of CIT v. Dr. Babubhai Mansukhbhai : 108ITR417(Guj) , on which much reliance has been placed by Mr. Sen. It is held therein that in the case of Hindus governed by the Mitakshara law, where a son inherits the self-acquired property of his father, the son takes it as the joint family property of himself and his son and not as his separate property. The correct status for the assessment to income-tax of the son in respect of such property is as representing his HUF. Their Lordships made a full discussion of the relevant sections of the Hindu Succession Act, and their applicability to the general Hindu laws governed by Mitak-shara branch at pp. 421-422 of the report which we may quote here :
'It will be noticed that both Section 6 and Section 30 deal with the undivided share of a Hindu in a Mitakshara coparcenary property. They do not deal with his individual self-acquired property. Therefore, it is obvious that what has been provided for in Section 6 and Section 30 of Hindu Succession Act, can in no way affect the character of the property in the hands of the son when the son gets the property by inheritance from his own father. Neither Section 6 nor Section 30 deals with such a situation. Under Section 8 of the Act, it has been provided that the property of a male Hindu dying intestate shall devolve according to Chapter II upon the heirs, being the relatives specified in Class I of the Schedule. If there is no heir of Class I, then upon the heirs being the relatives specified in Class II of the Schedule; and if there is no heir of any of the two classes, then upon the agnates of the deceased and if there is no agnate, then upon the cognates of the deceased. The result, therefore, is that so far as the property is concerned, it devolves according to the provisions of the Chapter in which Section 8 is located but that does not again deal with the character of the property in the hands of the person to whom the property devolves by succession. With respect to the learned judges of the Allahabad High Court, it is impossible to read into the words of Section 8 any provision which interferes with the scheme of Hindu law as it prevailed prior to the enactment of the Hindu Succession Act. Neither Section 6 nor Section 8 nor Section 30 affects this principle of Hindu Law as to in what capacity or in what character the son would enjoy the property once he received it from his father in succession.'
15. Reference may also be made in this connection to the decision of this court in the case of Malchand Thirani and Sons v. CIT : 121ITR976(Cal) . The decision therein though not very much relevant for our present purpose explains and distinguishes Sections 6 and 8 of the Hindu Succession Act.
16. In the case of Addl. CIT v. P. L. Karuppan Chettiar : 114ITR523(Mad) , the Full Bench of the Madras High Court, dissenting from the views of the Gujarat High Court in the case of CIT v. Dr. Babubhai Mansukhbhai : 108ITR417(Guj) , held that property inherited yb a son is separate property of the son and the income therefrom is not includible in the assessment of joint family of the son. In this case on a partition effected on March 22, 1954, in the HUF consisting of P, his wife their son, K, and their daughter-in-law, P was allotted certain properties as and for his share and got separated. This partition was accepted by the I.T. authorities under Section 25A of the Indian I.T. Act, 1922. K, along with his wife and their subsequently born children constituted an HUF which was being assessed in that status. P died on September 9, 1963, leaving behind his widow and divided son, B, who was the karta of his HUF as his legal heir and under Section 8 of the Hindu Succession Act, 1956, these two persons succeeded to the properties left by the deceased, P, and divided the properties among themselves.
17. In the assessment made on the HUF of which K was the karta for the assessment years 1966-67 to 1970-71, the ITO included for assessment the income received from the properties inherited by K from his father, P. This inclusion was confirmed by the AAC but on further appeal the Tribunal held that the property did not form part of the joint family properties and hence the income therefrom could not be assessed in the hands of the family. On a reference, it was held by the High Court that under the Hindu law, the property of a male Hindu devolved on his death on his sons and grandsons, as the grandsons also have an interest in the property. However, by reason of Section 8 of the Hindu Succession Act, 1956, the son's son gets excluded and the son alone inherits the property to the exclusion of his son. No interest would accrue to the grandson of P in the property left by him on his death. As the effect of Section 8 is directly derogatory of the law established according to Hindu law, the statutory provision must prevail in view of the unequivocal intention in the statute itself, expressed in Section 4(1), which says that to the extent to which provisions have been made in the Act, those provisions shall override the established provisions in the texts of the Hindu law. Accordingly, in the instant case, K alone took the properties obtained by his father, P, in the partition between them and irrespective of the question as to whether it was ancestral property in the hands of K or not, he would exclude his son. Further, since the existing grandson at the time of the death of the grandfather had been excluded, an after-born son of the son will not also get any interest which the son inherited from the father. In respect of the property obtained by K on the death of his father, P, it is not possible to visualise or envisage any HUF. The Tribunal was, therefore, correct in holding that the properties inherited by K from his divided father constituted his separate and individual property and not the property of a joint family consisting of himself, his wife, sons and daughters and hence the income therefrom is not assessable in the hands of the assessee-HUF.
18. In the light of this decision, the principle of Hindu law governed by the Mitakshara branch after the enactment of the Hindu Succession Act, 1956, may be examined. The intention to enact the statute was to provide for intestate succession among Hindus. It appears from Section 4 of the Act that only a limited overriding is intended by the passing of the Act. Section 6 of the Act makes provision for the devolution of an interest in a Mitak-shara coparcenary property, or, it deals with the question of a coparcener in a Mitakshara coparcenary dying without making any testamentary disposition to his undivided share in the coparcenary. It should be noted that the Act does not abolish the doctrine of acquisition of right by birth and the right of survivorship but that subject to the proviso to Section 6 of the Act. The proviso comes into play if a Hindu governed by the Mitakshara law does survive by a daughter's son or any family heir specified in Clause 1 of the Schedule.
19. Every coparcener is entitled to a share when partition takes place between members of the joint family. Such partition may be partial also. After such partition the separated member or his heirs cannot claim any share in the interest of the deceased in the coparcenary as the separated member has already gone out of the coparcenary. In case of partition between father and son and the son having obtained a share in the ancestral property, the son cannot claim a share out of the interest of the father in such coparcenary, if the father dies intestate. In this connection we may quote a passage of the judgment of M. H. Beg J. in the case of CIT v. Ram Rakshpal Ashok Kumar : 67ITR164(All) :
'There seems to be no scope for considerations of a wide and general nature about the objects attempted to be achieved by a piece of legislation when interpreting the clear words of the enactment. As has been repeatedly laid down by courts, both Indian and English, the intent and object have to be gathered primarily from the plain words of the statute. It is clear that the observations of Mulla's Commentary on Hindu Law, quoted above, relate only to what was attempted to be achieved by Section 6 of the Act. Section 6 of the Act is the only provision of the Act which deals with the devolution of interest in a Mitakshara coparcenary property on the death of a male Hindu after the commencement of the Act. The other sections apply equally to all Hindus as denned in the Act whether governed by the Mitakshara or Dayabhaga law. They also apply to Jains and Sikhs who are, as already observed, Hindus according to the definition of the term ' Hindu ' found in the Act. It is not possible to conceive of separate intents of a general provision of the Act with regard to separate groups of persons governed by separate schools of Hindu law. The only way of indicating any such separate intention is to make a special provision for a separate school of law as we find in Section 6 of the Act or in Section 17 of the Act, which contain special provisions respecting persons governed by special branches of personal law. Section 8 of the Act, which is invoked on behalf of the assessee, is one of the general provisions applicable to all Hindus. Therefore, observations made about the provisions of Section 6 of the Act cannot be appropriately used in interpreting Section 8 of the Act at all.'
20. The conclusion drawn by his Lordship is as follows (p. 174) :
'The position under the Hindu law is that partition takes away, qua a coparcener, the character of coparcenary property from the property which goes to the share of another coparcener upon a division, although the property obtained by a coparcener upon partition continues to be coparcenary property for him and his unseparated issue.'
21. Again, Section 30 of the Act makes provision for a male governed by Mitak-shara law to dispose of, by a testament, his interest in the coparcenary property. In such a case the provisions of Sections 6 and 8 would not be applicable. The general law of Mitakshara branch is now repealed by the Explanation to Section 30 which lays down that such interest of a Hindu male under Mitakshara is to be deemed to be the property capable of being disposed of by will. Thus, in view of the provisions made in Section 30 of the Hindu Succession Act, Jaskaran Bhutoria was competent enough to dispose of his property by a will or testament in favour of his sons, Jhumarmal and Sampatrai in 'Nibur Sattya', that is, absolute and full rights of disposal. In this view of the matter, we are, with due respect, in full agreement with the decision of the Full Bench of the Madras High Court in the case of Addl. CIT v. P. L. Karuppan Chettiar : 114ITR523(Mad) . In view of the foregoing discussions, we answer question No. 1 in the affirmative and in favour of the assessee.
22. As regards question No. 2, it was held by a Division Bench of this court in the case of CWT v. U. C. Mahatab : 78ITR214(Cal) , that where agricultural land has been taken away and has vested in the State under the Act, but where the final compensation assessment roll has not been prepared and published and the compensation officer has not calculated the amount, if any, at all payable to the assessee, then this inchoate right is not a legal right which can be regarded as an 'asset' within the meaning of Section 2(e) of the W.T. Act. Not being an asset, the mechanism of valuation provided in Section 7 of the W.T. Act will not apply.
23. As no time-limit has been fixed for the payment of the compensation and it may happen, that after making the deductions referred to in the Act, no compensation at all may be found to be payable to the assessee, if wealth-tax is imposed on the so-called right to compensation, then the assessee will keep on paying the tax year after year and may ultimately find that he cannot have any compensation at all when the compensation and calculations are made under Sections 16 and 17 of the West Bengal Estates Acquisition Act. These considerations are repugnant to the basic concept of a taxing law. This decision was mentioned and referred to before the Supreme Court in the case of Pandit Lakshmi Kant Jha v. CWT : 90ITR97(SC) of the report, the Supreme Court observed asfollows :
'Mr. Kolah has invited our attention to a decision of the CalcuttaHigh Court in the case of Commissioner of Wealth-tax v. U. C. Mahatab : 78ITR214(Cal) , wherein the court held that till the final publication ofthe compensation assessment roll under the West Bengal Estates Acquisition Act, the assessee had no legal right to compensation and the same couldnot be included in the definition of 'assets' in the Wealth-tax Act. It is,in our opinion, not necessary to express any view with regard to thecorrectness of that decision. Suffice it to say that theidecision in that caseproceeded upon the assumption that the provisions of the West BengalEstates Acquisition Act, 1953, were materially different from those of the Bihar Land Reforms Act. It was, in fact, on that ground that the learnedjudges of the Calcutta High Court distinguished the case of Maharajkumar Kamal Singh v. CWT 0065/1966 : 65ITR460(Patna) , as well as the decision of the Patna High Court which is now the subject-matter of the presentappeal.'
24. The net result is that the decision of this court in the case reported in : 78ITR214(Cal) (CWT v. U. C. Mahatab) stands as good law and we are bound by the said decision. In this view of the matter, we answer question No. 2 in the negative and in favour of the assessee.
25. Each party will pay and bear its own costs.
Sabyasachi Mukharji, J.
26. I agree.