TMI Blog1964 (11) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... lands in the districts of Warangal and Nalgonda in the erstwhile State of Hyderabad. Between the years 1928 and 1938, the father purchased some agricultural lands in the names of the respondent and the respondent's brothers. The Munagala Estate was abolished under the Madras Estates (Abolition and Conversion into Ryotwari) Act, 1948. The compensation in respect of this impartible estate was paid to the respondent's father, to the respondent and to the respondent's brothers as contemplated under section 45 of the 1948 Act. The lands situated in the erstwhile Hyderabad State were partitioned in the year 1950, and in 1954 the home farm lands were also divided. The assets forming the subject-matter of the reference consist of the respondent's investments in securities, shares, a partnership business, deposits in banks and agricultural produce from his lands. Their source was the compensation paid to the respondent under section 45 and the property that he obtained from his father. The rates of wealth-tax are less in the case of a Hindu undivided family than in the case of an individual. Both the Wealth-tax Officer and, on the appeals of the respondent, the Appellate Assistant Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is defined in section 2, clause (q), as meaning the last day of the previous year. It will be seen that in order to constitute net wealth chargeable under section 3, the assets must be property belonging to the assessee, who may be either an individual or a Hindu undivided family or a company. A person may hold some property in his individual right and other property in his right as the karta of a Hindu undivided family. His status need not be the same in relation to all the property held by him. Thus the point of the question refered to us is whether the assets comprised in the respondent's returns belonged to him alone or to a Hindu undivided family of which he is a member. In Kalyanji Vithaldas v. Commissioner of Income-tax, the question arose whether the income from ancestral property in the hands of Kanji and Sewdas, two of the appellants, consisting of their interest in a partnership business should be treated for the purpose of the Indian Income-tax Act, 1922 (XI of 1922), as the income of their respective Hindu undivided families or their individual income. Kanji's undivided family comprised himself, his wife and his daughter; and Sewdas's undivided family comprised only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tee on the ground that a man's ownership of property is not divested, divided or impaired by marriage or by the birth of a daughter. Although the pronouncement was made by the Judicial Committee more than twenty years prior to the passing of the Wealth-tax Act, there is no provision in the Wealth-tax Act defining a " Hindu undivided family " in a different sense. The principle of Kalyanji Vithaldas's case was applied by a Division Bench of the Madras High Court in K. R. Ramachandra Rao v. Commissioner of Wealth-tax and by a Division Bench of the Rajasthan High Court in Mukat Beharilal Bhargava v. Commissioner of Income-tax. In K. R. Ramachandra Rao v. Commissioner of Wealth-tax the assessee became the sole surviving coparcener of a Hindu undivided family and was an issueless widower with the result that no other persons such as widows or other female members of the family were entitled to any claims upon the estate. It was held that he was not a Hindu undivided family for wealth-tax assessment under the Wealth-tax Act. In Mukat Beharilal Bhargava v. Commissioner of Income-tax the assessee became the sole surviving coparcener upon his adoptive father's death and his Hindu undivide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld by him can be the joint property of his family. No exception can be taken to the proposition so stated. In Attorney-General v. Arunachalam Chettiar the question arose whether the property of a Hindu undivided family held by a sole surviving coparcener was the joint property of that Hindu undivided family for the purpose of section 73 of the Ceylon Estate Duty Ordinance No. 1 of 1938. A number of females belonged to the Hindu undivided family of the sole surviving coparcener, including his deceased son's widow who exercised her power of adoption after his death. Viscount Simonds agreed with the conclusion of the Supreme Court of Ceylon that the property was the joint property of the Hindu undivided family. It may be noted that a coparcener's widow with a power of adoption was a member of that family at all material times. In K. V. Deshpande v. Dhruwaraj his Lordship, Raghubar Dayal J., summarised the principles deduced from Shrinivas Krishnarao Kango v. Narayan Devji Kango and said: " A coparcenary continues to subsist so long as there is in existence a widow of a coparcener capable of bringing a son into existence by adoption; and if the widow made an adoption, the rights of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on partition must be made on him as the karta of his undivided family and not as an individual. No doubt, this decision supports the respondent. But the learned judges based themselves on the decision of the Bombay High Court in Commissioner of Income-tax v. Gomedalli Lakshminarayan, which was disapproved in Kalyanji Vithaldas's case and was reversed by the Privy Council in Commissioner of Income-tax v. A. P. Swamy Gomedalli. With great respect, we are unable to give effect to the view taken in Commissioner of Wealth-tax v. Lt. Col. D. C. Basappa. It is true that a person like the respondent can be described as the karta of his undivided family consisting of himself and his wife and daughters. But the question for the purpose of the Wealth-tax Act is whether the assets in his hands belonged to him alone or to a different entity, viz., his undivided family. As the wife and daughters constituting the other members of his undivided family did not have any rights of ownership over the assets, the assets belonged to him alone on the material dates. It may be that if the rights of maintenance of the assessee's wife and daughters take the form of debts owed by the assessee, the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X
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