BANERJEE J. - This reference, under section 27(1) of the Wealth-tax Act, has been made in circumstances hereinafter related.
Govind Chandra Das is the Karta of a Hindu undivided family consisting of himself and several others. The family is governed by the Dayabhaga school of Hindu law. They used to be assessed, for the purpose of wealth-tax, as Hindu undivided family, in respect of wealth consisting of house properties and bustee lands. For the assessment year 1961-62, they were so assessed, namely, assessed as Hindu undivided family by the Wealth-tax Officer. The assessee became aggrieved by the assessment and appealed before the Appellate Assistant Commissioner. It was contended before the Appellate Assistant Commissioner that inasmuch as the assessee family was governed by the Dayabhaga school of Hindu law 'there could be no Hindu undivided family in respect of the house properties which formed a the subject-matter of wealth-tax assessment'. The Appellate Assistant Commissioner upheld the contention and held that, since the assessee was governed by the Dayabhaga school of Hindu law, the house properties could not vet in the Hindu undivided family and could not, therefore, be assessed jointly in the status of Hindu undivided family. He, therefore, directed that the value of house properties, which was included in the net wealthy, should be detected from the assessment.
Aggrieved by the order of the Appellate Assistant Commissioner, the revenue appealed before the Tribunal. There was a difference of opinion between the Accountant Member and the Judicial Member. The Accountant Member held that the order passed by the Appellate Assistant Commissioner was legal and correct and the Judicial Member held a contrary opinion. Thereupon the matter was placed before the President of the Tribunal under section 5A(7) of the Indian Income-tax Act, 1922, to decide the following question of law :
'Whether, by virtue of the fact that the members of a Hindu undivided family governed by the Dayabhaga school of Hindu law are co-owners of the family property, having definite and ascertained shares therein, the house property and bustee lands, even though held jointly by much family, were not assessable to wealth-tax in the hands of the Hindu undivided family ?'
The President of the Tribunal, who heard the matter as the third member, agreed with the view expressed by the Judicial Member and allowed the departmental appeal.
There upon, the assessee obtained a reference of the following question of law to this court :
'Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the house properties possessed jointly by the members of the Hindu undivided family governed by the Dayabhaga school of Hindu law were assessable to wealth-tax jointly in the status of a Hindu undivided family ?'
A question similar to that we have to decide in this reference came up for consideration before this court in a writ application in Biswa Ranjan Sarvadhikary v. Income-tax Officer 1, where Sinha J. (as the Chief Justice then was) observed :
'...... where property is owned by two or more persons governed by the Dayabhaga scholl of Hindu law, and where their shares are definite and ascertainable, then although they are in joint possession, the tax will be assessed on the basis of the share of the income in the hands of the assessee, and not a of a Hindu undivided family.'
The same view appears in the judgment of this court in Commissioner of Income-tax v. Smt. Bani Rani Rudra 2. In that case the widow and son of a Hindu inherited properties of the deceased under the Dayabhaga system of law, read with section 3(1) of the Hindu Womens rights to Property Act, 1937, and section 14 of the Hindu Succession Act, 1956, and each of them became entitled to a definite one-half share in the property inherited.
In the circumstances, G. K. Mitter J. held that the share of each of them in the income from the house property should be included in his or her individual total income for the purpose of income-tax under section 9(1) read with section 9(3) of the Indian Income-tax Act, 1922, though they may be members of a Hindu undivided family.
On an interpretation of section 3 of the Wealth-tax Act, we are of the opinion that different considerations should not apply. The inherited property may have been possessed jointly by the members of the Hindu undivided family but they were individually entitled to a definite and ascertained share therein. Thus the property was not owned by the joint family but by the members thereof.
In the view that we take, we answer the question referred to this court in the negative and in favour of the assessee. There will be no order as to costs.
K. L. Roy J. - I agree.