CHAKRAVARTTI, C.J. - This is a refernce under section 63(I) of the Bengal Agricultural Income-tax Act and a somewhat unusal reference in that the Tribunal themselves say that the finding, the correctness of which has been put in issue by the question referred, was based on no evidence. Mr. Sen, appearing for the Department, has, however, tried to support the finding, but, in my opinion, he has not succeeded and could not succeed.
The assessee is one Behari Lal Mandal whose assessment for the assessment year 1949-50, relative to the accounting year I355 B. S., has given rise to the question referred. It appears that he has 9.63 acres of land standing in his on name. Besides thosde lands there are I5.43 acres standing in the name of his wife, Sm. Saraswati Dasi, and further ares standing in the name of his sons. With regard to the lands standing in the name of the sons, so question arises in the present reference.
As to the land standing in the name of the wife, Saraswati, it was contended before the Income-tax Officer that the lands belonged 'for all interests and purposes' to the lady, but ultimately the pleader representing the assessee gave up the contention. Thereupon, the income from the lands was included in the total income of the assesssee to be assessed in his hands. On appeal by the assessee, the Appellate Assistant Commissioner reversed the Income-tax Officers decision on the ground that the lands stood recorded in the name of Saraswati and no documents had been produced to show that they had been transferred to her by the assessee or even to show how or by whom they had been acquired. The effect of his decision was that he held that the lands had not been proved not to belong to the wife and accordingly he excluded the income form thsoe lands in the assessment of the assesee.
On further appeal by the Department, the Appellate Assistant Commissioners order was reversed by the Tribunal. They proceeded on two grounds. It was pointed out that the Appellate Assistant Commissioner had overlooked the fact that the assessees claim that the lands standing in the name of his wife belonged in fact to her had ultimately been abandoned by his lawyer. Since there was that abandonment of the contention, the Tribunal thought that 'the provision of section 12 was at once attracted, a feature which the Assistant Commissioner has wholly omitted to notice.' Giving their reasons in a more elaborate form the Tribunal observed further as follows :
'It is now far too late in the day to assert that the lawyers admission in the course of his argument on a certain point before the court does not bind his client. The giving up of such a point would necesarily enure for the benefit of his adversary. Besides, in the present case, giving up of the contention would automatically attract the operation of section 12 of the Act, suggesting that the element of adequate consideration within the meaning of section 12(a)(i) is wholly wanting. Another thing to bear in mind in this connection is that the inclusion of the wifes income in the husbands total income may not in any way impugn the transaction itself. Accordingly, in my view the Assistant Commissioner was in error in holding that the income from Saraswatis lands could not be assessed in the hands of the assessee.'
The Tribunal which have made the reference are slightly different in composition from the Tribunal which heard the Departments appeal. The president and the accountant member remain the same, but the lawyer member who delivered the judgment of the Tribunal has since been succeeded by a new member. Since the Tribunal as now constituted have themselves realised that the finding recorded by their body in their appellate order was based on no evidence, it would be ungracious to be too critical of their appellate order. I may point out, however, that it is absolutely incomprehensible to me how the abandonment of he assessees contention that the lands, standing in the name of his wife, really belonged to her would automatically attract the operation of section 12 of the Act. The contention initially put forward was that the lands did in fact belong to the wife, as the record showed. If that contention was abandoned, the effect would only be an admission that the lands did not belong to the wife. Strictly speaking it would not even automatically follow that the husbands was the owner of the lands, but having regard to the sphere of the controversy before the Income-tax officer, I would concede that the withdrawl of the initial claim would carry that implication. But the effect of the admission would be to make the husband the owner of the lands and if he was to be treated as the owner, it is impossible to see how section 12 of the Act would be attracted automatically or otherwise. It may be convenient to remind ourselves what the terms of section 12 are. So far as material, the section says that in computing the total agricultural income of any individual for the purpose of assessment, there shall be included so much of the total agricultural income of a wife of such individual as arise directly indirectly 'from assets transferred directly or indirectly to the wife by the husband otherwise than for adequate consideration or in connection with an agreement to live apart. It is, however, clear that in order that section may apply, it is essential that there should be a direct or indirect transfer of the assets, from which the income in question arose, to the wife by the husband. As the Appellate Assistant Commissioner pointed out, no documents relating to the lands, standing in the name of the wife, had been produced at all and certainly no document was produced to show, nor was it alleged by anyone, that the husband had transferred the lands to the wife. Assuming as I have assumed that the withdrawal of the contention that the lands really belonged to the wife involved an admission that they belonged husband, it does not follow that there had been aany transfer in favour of the wife In fact, if the lands were continuing to belong to the husband, it would rather follow that there had been no traansfer. Mr. Sen contended that if the husband had purchased the lands with his own money, but had them recorded in the name of the wife, that would own money, but had them recorded in the name of the wife, that would amount to an indirect transfer of the lands within the contemplation of section 12(a)(i). It has undoubtedly been held that if a husband supplies the consideration for the purchase of certain assets and then arranges to have the purchase made in the name of his wife, he transfers the assets. If not directly at least indirectly, by way of transferring the money to the wife with which ostensibly, but not really, she made the purchase. There is however, no finding in the present case, nor any evidence nor even suggestion that the husband had purchased the lands with his own money. Indeed, there is even no evidence that he acquired the lands by purchase at all; for all that one knows he might have got them as a gift from a third party or as I put in the course of argument, he might have got them way of consideration for a compromise with certain other persons. It appears to me that the facts of the present case, as founded, do not furnish evidence for any of the elements of section 12(a)(i) of the Act.
Mr. Sen referred to certain observation s made by an inspectors assessor in a certain report, although the Tribunal did not base their finding in any way on those observations. The utmost which the extract quoted in the order of the Appellate Assistant Commissioner can be said to make out is that the assessee was in possession and enjoyment of the lands. That however, is very different from his transferring the lands to the wife directly or indirectly. It is true that the lands stood in the name of the wife and if it could be shown that they had been originally purchased by the husband or at least that he had supplied the consideration, it could be presumed, thought perhaps it would not be proved, that the lands and come to stand in the name of the wife by virtue of a transfer from the husband, but there is not evidence of, as I have already pointed out, any initial purchase by the husband himself or the supply of the consideration by him. Mere possession, therefore, would not show that he was the owner of the lands in law, particularly as in the natural course of things, a wife would exercise possession though her husband. Mr. Sen also referred to a letter addressed to the inspector-assessor by two of the sons and a grandson of the assessee in which they had said that inasmuch as disputes had broken out between them, their father had decided to partition the property amongst them within a short time and that they were trying to see that he partitioned the property and arranged for the separate enjoyment and possession by the sons and the grandson during his lifetime. The Appellate Assistant Commissioner pointed out that there were other son of the assessee who had not jointed in writing that letter. But quite apart from the fact that the letter was only by two of the sons and a grandson, I am entirely unable to see how it could be established that the lands, standing in the name of the wife, belonged to the husband. The extracts appearing in the Assistant Commissioners order speaks of merely 'our property'. There is nothing to show that the expression covered or was intended to cover the properties standing in the name of the Saraswati as well. Even if the writes of the letter intended to speak of the whole of the properties standing variously in the name of the husband or the wife or the sons, it is again impossible to see how that statement would make out the title of the father, not to speak of any transfer direct or indirect to the wife.
I think I have said enough to show that the Tribunals application of section 12(a)(i) to the facts of the present case was entirely misconceived as fortunately they themselves appear to have realised subsequently.
The question referred is :
'Whether on the facts and in the circumstances of the case, the properties standing in the name of the assessees wife can be taxed under section 12 of the Act ?'
The answer to the question is, for the reasons I have already given, in the negative.
The assessee will have the costs of this reference.
GUHA, J. - I agree.
Questions answered in the negative.