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Issues: (i) Whether the finding that the declaration dated 18 June 1955 was a genuine document and had been acted upon was unreasonable or perverse. (ii) Whether, on a proper construction of the declaration, the assessee had thrown his self-acquired properties into the common hotchpot of the Hindu undivided family and was not assessable as the sole owner in the status of an individual.
Issue (i): Whether the finding that the declaration dated 18 June 1955 was a genuine document and had been acted upon was unreasonable or perverse.
Analysis: The declaration was proved by the notarial certificate and surrounding evidence, and the revenue abandoned the forgery allegation. A document may remain genuine even if some recitals are factually incorrect, provided the operative part is duly executed and acted upon. The Tribunal's acceptance of genuineness was supported by the record and could not be treated as perverse.
Conclusion: The finding was neither unreasonable nor perverse and was upheld in favour of the assessee.
Issue (ii): Whether, on a proper construction of the declaration, the assessee had thrown his self-acquired properties into the common hotchpot of the Hindu undivided family and was not assessable as the sole owner in the status of an individual.
Analysis: The operative clauses of the declaration showed an unequivocal intention to treat the properties and assets as joint family property and also recorded division of part of the properties among family members. Pre-existing joint family property or a nucleus was not necessary for such impressing of separate property with the character of joint family property. The declaration and subsequent acts were sufficient to constitute blending and conversion of the properties into joint family property.
Conclusion: The assessee had validly impressed the properties with the character of joint family property, and assessment in the status of an individual was not sustainable.
Final Conclusion: The reference was answered entirely in favour of the assessee, with both questions decided against the revenue and the assessee's HUF status accepted for the relevant assessments.
Ratio Decidendi: Self-acquired property can be converted into joint family property by a clear declaration and overt act, and no pre-existing nucleus of joint family property is necessary for such blending.
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