TaxTMI 
TaxTMI 
TaxTMI 
2005 (8) TMI 43
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....sessable in his hands as an individual. The assessee was a member of a bigger Hindu undivided family which was partitioned on January 1, 1972. At the time of partition and right up to January 22,1980, the assessee was a bachelor. During all these years, the income from assets on partition, was assessed in the hands of the assessee as his individual income. When the assessee got married on January 22,1980, the assessee contended that immediately after his marriage, the income from the assets received by him on partition was required to be assessed as Hindu undivided family income, the Hindu undivided family consisting of himself and his wife. The Income-tax Officer rejected the claim. Aggrieved by the said decision, the assessee filed appeal before the Appellate Assistant Commissioner which was also rejected. Against this decision of the Appellate Assistant Commissioner, the appeal, was filed before the Tribunal which allowed the appeal and set aside the order of the Appellate Assistant Commissioner. The assessee being unmarried was assessed by the Income-tax Officer in the status of individual in respect of both his professional income from medical practice as also income from the....
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....e case in CIT v. Vishnukumar Bhaiya [1983] 142 ITR 357 upon which the Income-tax Officer placed reliance and observed that the character of the Hindu undivided family property did not change in the hands of the assessee just because he is the sole surviving member and it cannot, therefore be given the same treatment as would be given to the self-acquired property of an individual. The Appellate Assistant Commissioner further noted that the Madhya Pradesh High Court judgment is in direct conflict with the decision of the Supreme Court in C. Krishna Prasad's case reported in [1974] 97 ITR 493 and its earlier Full Bench decision in CIT v. Krishna Kumar [1983] 143 ITR 462 (MP) wherein the court held that more than one male member is not necessary to constitute a Hindu undivided family. The Appellate Assistant Commissioner also referred to the judgment of the Supreme Court in the case of Surjit Lal Chhabda v. CIT [1975] 101 ITR 776 wherein a clear distinction is made between property which is already joint family property and property which is the self-acquired property of an individual. The Appellate Assistant Commissioner observed that the assessee received the joint family property o....
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.... for any purpose whatsoever." The Tribunal concluded as follows: "Thus, the event of the marriage on January 22, 1980, has not made any difference as far as Dr. Sultane is concerned." The Tribunal has also with approval referred to the distinction made by the departmental representative, in cases in which at the time of getting a share on partition, the assessee was already married and in cases where the marriage takes place after receipt of a share on partition as in the present case. Reliance has been placed on the judgment of the Patna High Court in the case of Hanumanmal Periwal v. CWT [1968] 67 ITR 320, wherein it was observed that: "There is a difference between a sole surviving coparcener in possession of ancestral property and a coparcener getting a moiety of ancestral property on partition. The difference lies in the character of the property. In the former case it is unbroken ancestral property of the joint family and the coparcenary unit is reduced to a single individual. In the latter case the property is a part of the ancestral property and the coparcenary is broken." The Tribunal, thus, observed that once a coparcenary is broken as in the present case, no additio....
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.... After he attained majority, he disclosed the share income in his return in the status of individual. When the assessee got married he filed the return and claimed the status of a smaller Hindu undivided family in respect of the share income obtained at the partition. The authorities below rejected the claim on the ground that in order to constitute a joint family it is necessary that there should be two male coparceners but the Tribunal accepted the assessee's claim that his share income was not assessable in his individual assessment and directed the Income-tax Officer to modify the assessment. In the aforesaid case, reliance was placed by learned counsel for the Revenue on the Full Bench decision of the Patna High Court in CIT v. Shankar Lal Budhia [1987] 165 ITR 380 in which the Patna High Court made reference to the case of Surjit Lal Chhabda [1975] 101 ITR 776 (SC) wherein the Supreme Court had observed as follows: "The joint Hindu family, with all its incidents, is thus a creature of law and cannot be created by act of parties, except to the extent to which a stranger may be affiliated to the family by adoption. But the absence of an antecedent history of jointness between....
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....unsel for the Revenue on the Full Bench decision of the Patna High Court in the case of Shankar Lal Budhia [1987] 165 ITR 380 is of no avail to the Revenue as the Full Bench of the Patna High Court had no occasion to consider the two Division Bench judgments of the Gujarat High Court. Furthermore, it is contended that the Supreme Court decision in N.V. Narendranath [1969] 74 ITR 190 wherein the following observations were made, was also not considered by the Full Bench of the Patna High Court, viz.: "An individual who receives ancestral property at a partition and who subsequently acquires family, but has no male issue, would hold that property only as the property of a Hindu undivided family. Under the Hindu law the wife of a coparcener is certainly a member of the family ... Whatever be the school of Hindu law by which a person is governed, the basic concept of a Hindu undivided family in the sense of who can be its members is just the same. Thus, it is now abundantly clear that in order to constitute a joint family, it is not always necessary that there must be two male members ...". The Gujarat High Court further observed in Parshottamdas K. Panchal's case [2002] 257 ITR 96 a....
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....ishnukumar Bhaiya [1983] 142 ITR 357 (MP) have been dissented from. The case of Surjit Lal Chhabda [1975] 101 ITR 776 (SC) has been explained. It is pointed out that in the case of Narendranath v. CWT [1969] 74 ITR 190, the apex court held that the ancestral property allotted to a member whose family consisted of himself, his wife and his daughter was the property belonging to the Hindu undivided family and required to be assessed as such, notwithstanding the absence of a son who alone could claim partition. In that case, the two factors referred to earlier coalesced-there existed a family and the property was ancestral. The Supreme Court disagreed with the High Court which had held that in the absence of a son who could claim a partition, the property though ancestral was only to be assessed as individual property of the assessee therein. The Madras High Court in Rajagopalan's case [2000] 241 ITR 344 disagreed with the view taken by the High Court of Patna in the case of Shankar Lal Budhia [1987] 165 ITR 380 [FB] and by the High Court of Madhya Pradesh in Vishnukumar Bhaiya [1982] 142 ITR 357 that in a case where an individual received his share of the ancestral property on a par....
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....ble in the status of a Hindu undivided family for the assessment years 1980-81 to 1983-84. Thus, it is seen that the assessee has relied on the judgments of several High Courts which in turn have referred to the observations of the Supreme Court in Surjit Lal Chhabda's case [1975] 101 ITR 776 and came to the conclusion that an assessee who has received a share on partition of Hindu undivided family property but subsequently gets married is entitled to be assessed in respect of the said share in the said property in the status of Hindu undivided family. The learned Tribunal in allowing the appeal and upholding the contention of the Department that the event of the assessee's marriage on January 22, 1980, did not bring about any notional change in the property which was absolutely vested in the assessee and therefore, could not be assessed as Hindu undivided family property claims to be fortified in its conclusions by the judgment of the Supreme Court in the case of Chander Sen [1986] 161 ITR 370 which is the latest judgment relevant to the point in controversy decided on July 16, 1986. A perusal of the said judgment, however, discloses that the observations of the judgment therein....
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....y and the interest credited to that amount was allowable as a deduction in computing the business income of that family." Clearly, the reliance by the Tribunal on Chander Sen's case [1986] 161 ITR 370 (SC) is wholly misplaced. Hence, the observation of the Tribunal that the event of the marriage of the assessee on January 22, 1980, did not bring about any change in the property which remained absolutely vested in the assessee, is unwarranted. So also the observations of the Tribunal that "the share obtained on partition on January 1, 1972, underwent a metamorphosis at the time of partition breaking the coparcenary tie and making the property of the assessee absolutely as individual property and there could be no second metamorphosis at the time of the marriage on January 22, 1980. Such an occasion may arise on the birth of a son but till then the property will continue to be that of the same individual" are untenable. The observations of the Tribunal are self-contradictory: on the one hand, it is stated that there could be no second metamorphosis at the time of the marriage on January 22, 1980, on the other, it is admitted that such an occasion could arise on the birth of a son, ....
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....re was only one male member or one coparcener. The dictum that "once Hindu undivided family always Hindu undivided family" has been accepted all along. In the said case of Gowli Buddanna v. CIT [1966] 60 ITR 293, the apex court quoted with approval the following observations of the Judicial Committee of the Privy Council in the case arising from Ceylon viz. Attorney-General of Ceylon v. AR. Arunachalam Chettiar (No. 2) [1958] 34 ITR (ED) 42; [1957] AC 540 (PC): "... though it may be correct to speak of him (the sole surviving coparcener) as the 'owner', yet it is still correct to describe that which he owns as the joint family property. For his ownership is such that upon the adoption of a son it assumes a different quality: it is such, too, that female members of the family (whose members may increase) have a right to maintenance out of it and in some circumstances to a charge for maintenance upon it. And these are incidents which arise, notwithstanding his so-called ownership, just because the property has been and has not ceased to be joint family property ... it would not appear reasonable to impart to the Legislature the intention to discriminate, so long as the family itself....