TMI Blog1972 (1) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... e as in the status of a Hindu undivided family. The deceased published a statement in two of the Tamil dailies on the 7th and 8th May, 1957, to the effect that he had abandoned all his separate claims in the properties and had thrown his self-acquired properties in the common stock and had treated them as joint family properties. The Assistant Controller of Estate Duty, Madurai, was of the view that the fact that in the income-tax proceedings prior to 1955-56 the status of the deceased was accepted as a Hindu undivided family was immaterial on the ground that the question of status had been properly investigated and the correct status determined as " individual " from the assessment year 1955-56, that since the deceased died in 1957 the income-tax assessment for 1958-59 should have been made on the individual till the date of death and thereafter as Hindu undivided family and that the assessment made without splitting the period as a Hindu undivided family was not conclusive of the correct status. The Assistant Controller was also of the view that the statement published in the dailies evidencing the unilateral declaration of the intention of the deceased to throw his self-acquir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e against the deceased personally or against his property " within the meaning of Explanation 1 to section 2(15) or the extinguishment at the expense of the deceased of " other right " within the meaning of Explanation 2 to section 2(15) of the Act, so as to attract the provisions of section 9. It was contended by the learned counsel for the revenue that the question whether the deceased was holding the properties as properties belonging to the Hindu undivided family prior to the publication of the statement in the dailies on the 7th and 8th May, 1957, has not been referred to this court for opinion and that the act of throwing the self-acquired properties into the common stock would amount to a " disposition " within the meaning of section 27(1) read with Explanations 1 and 2 to section 2(15) of the Act. One of the grounds on which the accountable persons contended that the entire properties shall not be deemed to have passed under section 9 of the Act was that the self-acquired properties had lost its character after the properties were thrown into the hotchpot ever since the deceased became an assessee for income-tax purposes and the assessments were made as a Hindu undivide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f any, to the above address within fifteen days' time from this day of notice." The Board and the Assistant Controller had taken this statement as a unilateral declaration made on that day throwing his self-acquired properties into the common stock, while it is the contention of the learned counsel for the accountable person that it evidences an earlier declaration consistent with the assessment orders made prior to the year 1955-56 by which he had thrown his self-acquired properties in the common stock and had always been holding them as the properties belonging to the Hindu undivided family. In our opinion, the learned counsel for the accountable person is well-founded in his contention. It is not disputed that the assessment orders prior to 1955-56 ever since 1946-47 were on the basis of a Hindu undivided family. It was not the case of the department that the deceased submitted the returns under the Income-tax Act in the status of an " individual " but was wrongly assessed as a " Hindu undivided family ". The Board and the Assistant Controller stated that the assessment orders prior to 1955-56 could not be relied on. We fail to see how if the assessment orders prior to 1955-56 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The separate property of a member of a joint Hindu family may be impressed with the character of joint family property, if it is voluntarily thrown by him into the common stock with the intention of abandoning, waiving or surrendering his separate right or exclusive right therein. The act by which the coparcener throws his separate property into the common stock is a unilateral act. There is no question of either the family rejecting or objecting to it. By his individual volition he renounces his right in that property and treats it as property of the family. When a coparcener throws his separate property into the common stock he makes no gift under Chapter VII of the Transfer of Property Act. Thus the two essential requisites for the conversion are-(1) the existence of coparcenary ; and (2) the deliberate intention formed by the coparcener owning separate property to treat the same as joint family property. The intention may manifest itself in any form, such as by a statement in a deposition, an affidavit, execution of a document as a declaratory deed, or by course of conduct. What transforms the separate property into joint family property is not the outward act or the conduct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e learned counsel for the revenue that by throwing the self-acquired properties into the common stock of the joint family, the deceased has created a right enforceable against him personally or against the properties within the meaning of Explanation 1 to section 2(15) of the Act and that, therefore, under that Explanation it shall be deemed to be a disposition made by the deceased. The learned counsel would also contend that the right created against him or against the properties was a right in favour of the sons or the other coparceners to demand partition of the properties which were the self-acquired properties of the deceased. Under the Hindu law the right of the coparcener to demand partition is a birth-right and not conferred on him by the father or other coparceners. In the Full Bench decision of this court in Commissioner of Gift-tax v. P.Rangasami Naidu after referring to the various texts of Hindu law, it was held that : " With the father having absolute power of disposition inter vivos or testamentary in respect of his self-acquisition and with no power in the son to interdict any alienation or disposition or call for partition, the son's interest is next to nothing. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the self-acquired property into the common stock. It, therefore, follows that there was no extinguishment of the right of the deceased and creation of a right in favour of another, in the case of throwing the self-acquired properties into the common stock. The decision in S. P. Valliammai Achi v. Controller of Estate Duty, relied on by the learned counsel for the revenue, and the decision in Kantilal Trikamlal v. Controller of Estate Duty, relied on by the learned counsel for the accountable person, related to what we may term as " unequal partitions ". They do not deal with cases of throwing the self-acquired properties into the common stock. We are not concerned with the case as to whether an unequal partition would amount to an extinguishment of a right and creation of a benefit within the meaning of Explanation 2 to section 2(15), which was the point that was considered in those cases. The learned counsel for the accountable person also contended that the word " other property " in Explanations 1 and 2 have to be read ejusdem genesis with the word " debt " and referred to in, section 45(1) and (2) of the English Finance Act, 1940, which is in pari materia with Explanations 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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