TaxTMI 
TaxTMI 
TaxTMI 
2006 (7) TMI 288
X X X X Extracts X X X X
X X X X Extracts X X X X
....r section 171 of the Act which took place on 16-9-1994. 3. The briefly stated facts of the case are that the assessee Hindu Undivided Family of Shri P.C. Ramakrishna consists of Shri P.C. Ramakrishna, his wife and his two daughters viz., Ms. Samyuktha Ramakrishna and Ms. Saranya Ramakrishna. There was an oral total partition of HUF on 16-9-1994 between Sri P.C. Ramakrishna, his wife, Smt. Hymavathi Ramakrishna and two daughters. Under this oral partition, the two. daughters, Ms. Samyuktha Ramakrishna and Ms. Saranya Ramakrishna were allotted Rs. 12,50,000 each and these amounts were adjusted against a sum of Rs. 12,50,000 advanced to each of them earlier as loan by HUF. In the said partition, all other properties of HUF were allotted to Sri P.C. Ramakrishna. This oral partition took place on 16-9-1994 which was subsequently confirmed by a Deed of Declaration confirming the partition. In this Deed of Declaration of confirmation dated 9-3-1995 which was signed by Sri P.C. Ramakrishna for himself and as guardian for his minor daughter, Ms. Saranya Ramakrishna and elder daughter, Ms. Samyuktha Ramakrishna, Shri P.C. Ramakrishna was allotted all the properties indicated in Schedule II ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....btaining prior to the amendment was that in regard to coparcenary property, only the coparceners (male members) had the right to claim partition after providing for the marriage and maintenance expenses of the female members of the HUF. By making an amendment to the Succession Act, what the Legislature has intended to enact was, to provide an opening by way of right for the female members of the family out of the ancestral property belonging to the family, whenever a partition takes place. The contradistinction in this context is that a mere right and not inherent right has been provided which is "sui-juris" to the limited extent of enforcing a clear right over the property, on par with the sons of the family, in the event of partition. In this case, partition is reported to have been effected unilaterally and recourse is had to be amendment made by the Tamilnadu Amendment Act. The amendment does not enjoin a right on the female members to ensure an inherent right of partition." Another reason to reject the assessee's claim of partition is that the assessee's wife, Smt. Hymavathi Ramakrishna has not been provided any sum for her maintenance in the declaration of partition. In view....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gislature has in mind cannot be equated with a mere severance of the status of the joint family which can be effected by an expression of a mere desire by a family member to do so. The partition that the Legislature has in mind is a partition complete in all respects which has brought about an irreversible situation. Where a partition of the property is effected by metes and bounds, the daughters cannot be deprived of the benefits conferred by the Act. According to the ld. Counsel for the assessee, the Hon'ble Supreme Court has held that the legislation is beneficial and placed on the statute book with the avowed object of benefiting daughter which is a vulnerable section of the society in all its stratas, it is necessary to give a liberal effect to it. Further he argued that as per the amended provisions in the Hindu Succession (Tamilnadu) Act, the difference between daughter and son of the Mitakshara Hindu Family is removed and the daughter is conferred the coparcenary rights in the joint family property by birth in the same manner and to the same extent as the son. In view of the new provisions, daughter is entitled to claim partition of H.U.F. Hence, family partition of Shri P.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....his Act or any other law for the time being in force, as property capable of being disposed of by her by will or other testamentary disposition; (iv) nothing in clause (ii) shall apply to a daughter married prior to or to a partition which had been effected before the commencement of the Hindu Succession (Andhra Pradesh Amendment) Act, 1986." 8. The Hon'ble Apex Court has considered the issue regarding the preliminary decree which has already been passed prior to the amended provisions and the High Court committed an error in directing the trial court to allot shares to the unmarried daughters. This was pleaded before the Hon'ble Apex Court. The Hon'ble Apex Court has admitted that under the unamended Act, unmarried daughters of a Hindu Mitakshara family were not entitled to any share in the joint family property. But the State of Andhra Pradesh removed the injustice to the daughters so far as that State was covered by newly introduced section 29A in the Act and the Hon'ble Apex Court has held in para 6 that by way of amendment, the daughter is conferred the coparcenary rights in the property by birth in the same manner and to the same extent as the son, para 6 of the judgment re....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... partition is filed in a court, a preliminary decree is passed determining shares of the members of the family. The final decree follows, thereafter, allotting specific properties and directing the partition of the immovable properties by metes and bounds. Unless and until the final decree is passed and the allottees of the shares are put in possession of the respective property, the partition is not complete. The preliminary decree which determines shares does not bring about the final partition. For, pending the final decree the shares themselves are liable to be varied on account of the intervening events. In the instant case, there is no dispute that only a preliminary decree had been passed and before the final decree could be passed the amending Act came into force as a result of which clause (ii) of section 29A of the Act became applicable. This intervening event which gave shares to respondents 2 to 5 had the effect of varying shares of the parties like any supervening development. Since the legislation is beneficial and placed on the statute book with the avowed object of benefiting women which is a vulnerable section of the society in all its stratas, it is necessary to g....
X X X X Extracts X X X X
X X X X Extracts X X X X
....table to the predeceased child of a predeceased son or of a predeceased daughter, if such child had been alive at the time of the partition, shall be allotted to the child of such predeceased, child of the predeceased son or of the predeceased daughter, as the case may be; (iii) any property to which a female Hindu becomes entitled by virtue of the provisions of clause (i) shall be held by her with the incidents of coparcenary ownership and shall be regarded, notwithstanding anything contained in this Act or any other law for the time being in force, as property capable of being disposed of by her by will or other testamentary disposition; (iv) nothing in this Chapter shall apply to a daughter married before the date of the commencement of the Hindu Succession (Tamil Nadu Amendment) Act, 1989; (v) nothing in clause (ii) shall apply to a partition which had been effected before the date of the commencement of the Hindu Succession (Tamil Nadu Amendment) Act, 1989. 29B. Interest to devolve by survivorship on death.-When a female Hindu dies after the date of the commencement of the Hindu Succession (Tamil Nadu Amendment) Act, 1989, having at the time of her death, an interest in a ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he time of his death consisted of himself, his wife and two sons and he was the manager of Joint Hindu Family. Before the Asstt. Controller of Estate Duty it was contended by the accountable person that only 1/4th interest in the joint family property passed on the death of Govinda Bhat on the basis that the wife of Govinda Bhat also had a share in the joint family property. The Asstt. CED rejected the said contention. The Appellate CED also rejected it in the appeal filed by the accountable person. Aggrieved by the order of the Appellate Controller, the accountable person filed an appeal before the Tribunal, Bangalore Bench. In that appeal, in addition to the contention referred to above, he raised a further contention that by virtue of section 33(1)(n) of the Act, the value of the interest of the lineal descendants in the residential house in which the deceased was living, was also not liable to be included for the purpose of rate under. section 34(1)(c) of the Act. The Tribunal held that the entire value of the residential house had to be excluded from consideration both under section 34(1)(a) and under section 34(1)(c), in view of section 33(1)(c) of the Act. But the contention....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the personal obligation of the husband, which does not result in any share in the husband's property; which is indicative of the fact that a wife has got no legal right to claim any share in the husband's property whether it is his individual property or his right in the joint family property. 12. The Assessing Officer while refusing recognition to the partition has also stated that the partition was by reason of unilateral action on the part of the father and hence cannot be accepted as genuine. Factually, this view of the Assessing Officer is incorrect and has probably arisen as a result of the misunderstanding on the part of the Assessing Officer in interpreting the provisions of Tamil Nadu Amendment Act, 1989, incorporating section 29A to the Hindu Succession Act, 1956. The Assessing Officer has started with the preposition that the effect of the Amending Act of 1989 is not to make the daughters coparceners but only confers on them a right to claim a share equal to that of the coparcener (male members) in the event of partition. A reading of sub-section (1) of section 29A clearly indicates that the daughter of a coparcener shall become a coparcener in her own right in the same....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Samyuktha Ramakrishna and Ms. Saranya Ramakrishna along with his wife, Smt. Hymavathi Ramakrishna are the members of H.U.F. After the amendment of Hindu Succession (T.N. Amendment) Act, 1989 vide clauses (i) and (ii), the daughter in H.U.F. shall by birth become a coparcener in her own right in the same manners as the son and have the same rights in the coparcenary property as she would have had if she had been a son, inclusive of the right to claim by survivorship and shall be subject to liabilities and disabilities in respect thereto as the son. She is entitled to partition of a Joint Hindu Family coparcenary property and in such partition, Hindu Family coparcenary property shall be so divided to a daughter so as to allot the same share as is allottable to a son. The amendment brought out w.e.f. 25th March, 1989 has removed the distinction as regards to a son or a daughter in respect thereto coparcenary property of Joint Hindu family as governed by Mitakshara law and daughters are clearly treated as coparceners. In the present case, there are two daughters to the Karta. Hence, there are three coparceners in the Joint Hindu Family and the daughters have been allotted a sum of Rs. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....period of one year before or two years after the date on which the transfer took place purchased, or has within a period of three years after that date constructed, a residential house (hereinafter in this section referred to as the new asset), the capital gain shall be dealt with in accordance with the following provisions of this section that is to say,- (a) & (b) Provided that nothing contained in this sub-section shall apply where the assessee owns on the date of the transfer of the original asset, or purchases, within the period of one year after such date, or constructs, within the period of three years after such date, any residential house, the income from which is chargeable under the head "Income from house property", other than the new asset." On a comparison of the phraseology of sections 54(1) and 54F of the Act as above, it appears that the subject-matter of the transfer in section 54(1) of the Act is residential house whereas in section 54F of the Act is any long-term capital asset, not being a residential house, whereas in order to gain full exemption under section 54(1)(a) of the Act, only the whole of the amount of capital gains arising out of transfer of the o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the same building for the purpose of his own residence and are being used by him for that purpose only. The mere fact that the assessee had purchased them jointly either in the name of his wife or in the names of his sons would not materially affect or alter the factual position that he is the owner of all the four flats and that he is also living in them along with the members of his family. The fact that on a future date the assessee may divide these properties among the members of his family is of no relevance or consequence for the purpose of allowing relief to the assessee under section 54, since the assessee has fulfilled the conditions laid down under section 54, namely, that he had purchased a house for his own residence by investing the sale proceeds of his former residential house in the purchase of the assessee's family with ten members, the accommodation acquired by the assessee in the form of four flats in the same building is commensurate to his requirements. We are, therefore, inclined to accept the contentions of the learned counsel for the appellant and hold that the assessee is entitled to full relief under section 54 in respect of the entire amount of Rs. 1,77,75....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r residential purpose. In the present case the assessee is a Hindu undivided family consisting of four adult male members. Each of them is occupying one residential unit in the building bearing door Nos. 92 and 92A. It is well settled that though a Hindu undivided family is ordinarily joint not only in estate but also in food and worship, the members of such family need not have a common residence. In other words, the family may continue to remain undivided even though different members of the family are residing separately. If a building otherwise comes within the meaning of the word "house", the mere fact that different members of the Hindu undivided family who own that building, are living separately in different self -contained portions thereof, will not, in our opinion, constitute that building into many houses." Further, the Hon'ble Tribunal in the case of D. Anand Basappa v. ITO [2004] 91 ITD 53 (Hyd.) has discussed the words and phrases 'a residential house' which reads as under: "7.6 It is also observed in Mrs. Gulshanbanoo R. Mukhi's case that the intention of the Legislature is clear to grant exemption for only one house. We are unable to find any such intention anywhe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l gains is charged to tax. If, however, the amount of capital gain is equal to or less than the cost of the house property purchased or constructed, the capital gain is completely exempted from income-tax. If such house property purchased or constructed is transferred within a period of three years of its purchase or construction the capital gain on the property so transferred is calculated by reducing the cost of its acquisition by the amount of the capital gain exempted from income-tax. 19.2 The conditions of self-occupation of the property by the assessee or his parent before its transfer and the purchase or construction of the new property to be used for the residence of the assessee for the purposes of exemption of capital gains created hardship for assessees. This was usually due to the fact of employment or business of the assessee at a place different from the place where such property was situated. 19.3 The Finance Act has made the following modifications in section 54 of the Income-tax Act, namely:- (i) The conditions of residence by the assessee or his parent in the property which was transferred, as also residence by the assessee in the new property purchased or cons....