TMI Blog1977 (11) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... ded the net income from the residential house in the income of the assessee, relying on a Bench decision of this court in the case of Mohammad Usman Khan v. Amir Mian AIR 1949 Pat 237. The assessee filed an appeal before the Appellate Assistant Commissioner, who allowed the claim of the assessee, following the decision of the Tribunal in the assessee's own case for the assessment year 1963-64, in Income-tax Appeal No. 10544-65, dated the 12th April, 1966. The department thereupon filed an appeal, which was dismissed by the Tribunal, following its earlier decision. It may be mentioned that against the order of the Tribunal for the assessment year 1963-64, also an identical question came up to this court in a reference and the question was re-framed and answered in favour of the assessee in Tax Case No. 10 of 1968. The High Court affirmed the view taken by the Tribunal that there being a valid and completed gift of the house to the wife, in lieu of dower debt, the income of the house was not taxable in the hands of the assessee. When the present case came up for hearing before a Bench of this court, it observed that the Bench, which had heard the earlier reference in Tax Case No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question that has been raised in this reference, as to whether the assessee could make an oral gift to his wife in lieu of dower debt, was neither canvassed nor decided in the earlier reference (Tax Case No. 10 of 1968). In paragraph 138 of Mulla's Principles of Mohammedan Law, seventeenth edition, " hiba " has been defined as follows : "A hiba or gift is 'a transfer of property, made immediately, and without any exchange', by one person to another, and accepted by or on behalf of the latter." " Hiba ", therefore, has to be a gift without anything in its return or exchange and it is settled law that no written document is necessary for a Mohammedan gift to be valid, and its three essential ingredients are declaration of the gift by the donor, its acceptance, express or implied, by or on behalf of the donee, and delivery of possession of the subject of the gift. If these three conditions are complied with, then the gift is complete. The assessee's case has been that the gift was in lieu of dower debt. Therefore, it cannot be a case of pure hiba, as a hiba to be good has to be without any exchange. It will really be a case of hiba-bil-iwaz, as defined by Mulla, in his Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arifuddin Mohammad v. Mohiuddin Mohammad, AIR 1927 Cal 808, and Fateh Ali Shah v. Muhammad Baksh, AIR 1928 Lah 516. It also discussed and relied on the high authority of Mahmood J. in the case of Fida Ali v. Muzaffar Ali [1882] ILR 5 All 65. Some observations of Manohar Lall J., in his concurrent judgment, may also be usefully reproduced (See AIR 1949 Pat 237, 240) : " I should have thought that after the decision of their Lordships of the judicial Committee in Hitendra Singh v. Rameshwar Singh, AIR 1928 PC 112, in which the judgment was delivered by that eminent Muhammadan Jurist, Mr. Ameer Ali, there could be no possible controversy--that view was not novel but had been expressed by Mr. Ameer Ali in his well-known book on Muhammadan Law, 4th edition, pages 162-163, and is in accord with the high authority of Mahmood J. in Fida Ali's case [1882] ILR 5 All 65 and Rahim Baksh v. Muhammad Hasan [1888] ILR 11 All 1. But Mr. B. C. De has been able to cite some contrary decisions of the Allahabad High Court and of the Oudh Chief Court which on investigation appear to be contradictory as has been shown by my learned brother. " In the earlier decisions of this Oudh Chief Court and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is that if the transfer is by a document in respect of a specified amount of dower, mentioned therein, then it will be a sale and that Mahmood J. has not laid down, as has been ascribed to his Lordship in the decisions relied upon in Mohammed Usman Khan v. Amir Mian, AIR 1949 Pat 237, that the transfer in lieu of dower will be sale in all circumstances. There is no substance in this submission of Mr. Hussain. What has been laid down in that decision is based on the rules of Mohammedan law and is of general application, as will be apparent from the following--See [1882] ILR 5 All 65, 69 : " It is an equally well recognized rule of that law that transfer of property by the debtor to the creditor in payment of the debt constitutes sale, and the rule is wide enough to include transfer of property by the husband to the wife in payment of her ascertained dower." The decision in the case of Rahim Baksh v. Muhammad Hasan [1888] ILR 11 All 1, relied upon by Mr. Hussain, in support of his submission, is also not of any help. In that case a deed of gift was executed in consideration of natural love and affection and services rendered and was sought to be supported as a hiba-bil-iwas. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ok VIII, of Baillie's Digest of Mohammedan Law, which is only an abbreviated reproduction of Fatwa Alamgiri and may usefully be quoted : " Hiba-bi-iwaz means, literally, gift for an exchange and it is of two kinds, according as the iwaz or exchange is, or is not, stipulated for at the time of the gift. In both kinds there are two distinct acts ; first, the original gift, and second, the iwaz or exchange. But in the hiba-bil-iwaz of India, there is only one act ; the iwaz, or exchange, being involved in the contract of gift as its direct consideration and all are agreed that if a person should say, ' I have given this to thee for so much ', it would be a sale, for the definition of sale is an exchange of property and the exchange may be effected by the word ' give ' as well as by the word ' sell '. The transaction which goes by the name of hiba-bil-iwaz in India is, therefore, in reality not at proper hiba-bil-iwaz of either kind, but a sale, and has all the incidents of the latter contract. Accordingly, possession is not required to complete the transfer of it, though absolutely necessary in gift, and what is of great importance in India, an undivided share in property capable o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed at any earlier stage the case that it was a case of pure gift, i.e., a hiba, without any consideration, it is too late for him now to raise this plea in a reference before this court. Mr. Asghar Hussain has also strenuously urged that the instant case is one of assignment of the house in exchange of dower debt, and, it is, therefore, a gift and not a sale. He relied on the decisions in the cases of Jaitunbi Fatrubhai v. Fatrubhai Kasambhai, AIR 1948 Bom 114 and Mohd. Hashim v. Aminabi AIR 1952 Hyd 3. From the statement of case, submitted by the Tribunal, it is manifest that the claim of the assessee was that he had transferred the residential house to his wife in discharge of the dower debt and not by way of assignment. The orders of assessment of the taxing authorities, which are annexures A, B, C and D, also do not show that there was any assignment of the house in question. The statement of case as well as the orders of assessment show that the assessee had given the house in question in discharge of the dower debt. In the case of Jaitunbi Fatrubhai, AIR 1948 Bom 114, a land was assigned by the bridegroom to the bride in lieu of mahar. In that case, the entry made in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e admitted the position that it was really a gift. Strong reliance has been placed in its support on the decisions in the cases of Hoystead v. Commissioner of Taxation [1926] AC 155 (PC), Sankaralinga Nadar v. Commissioner of Income-tax, AIR 1930 Mad 209 [FB], Kaniram Ganpat Rai v. Commissioner of Income-tax [1941] 9 ITR 332 (Pat) and Kamlapat Motilal v. Commissioner of Income-tax [1950] 18 ITR 812 (All). There is no substance in this submission of the learned counsel, in view of the decision of the Supreme Court in the case of New Jehangir Vakil Mills Co. Ltd. v. Commissioner of Income-tax [1963] 49 ITR 137 (SC), wherein Hoystead's case [1926] AC 155 (PC) was not approved. Relevant portion of the decision of the Supreme Court may usefully be quoted : " In......Hoystead v. Commissioner of Taxation [1926] AC 155 (PC), one of the questions was whether certain beneficiaries under a will were joint owners. It was held that although in a previous litigation no express decision had been given whether the beneficiaries were joint owners, it being assumed and admitted that they were, the matter so admitted was so fundamental to the decision then given that it estopped the Commissioner. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 273 (SC), which was also a case of gift, is a settlor on the point. In that case, for the assessment years 1945-46 and 1946-47, two gifts of certain sums of money made by the assessee to his brother and nephew were held to be collusive by the income-tax authorities and they added the income of the gifted property as the income of the assessee. The High Court did not interfere on reference (Vide Kanhaiyalal Lohia v. Commissioner of Income-tax--unreported). The Supreme Court also refused to interfere with the findings of the Tribunal [Vide Kanhaiyalal Lohia v. Commissioner of Income-tax [1962] 44 ITR 405 (SC)]. For the subsequent years, 1947-48 to 1951-52, the Tribunal came to an opposite conclusion on further evidence and accepted the gifts to be valid. On reference, the High Court refused to interfere (Vide Commissioner of Income-tax v. Brijlal Lohia [1967] 66 ITR 97 (Cal)). Thereafter, the matter went up to the Supreme Court at the instance of the Commissioner of Income-tax and the Supreme Court held as follows (See [1972] 84 ITR 273, 277) : " The fact that in the earlier proceedings the Tribunal took a different view of those deeds is not a conclusive circumstance. The deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se was incorrectly decided inasmuch as such a transaction being not a true hiba-bil-iwaz, but a sale, and so can be effected only by a registered deed, when the property involved is valued more than one hundred rupees, and that the case of Mohammad Usman Khan, AIR 1949 Pat 237, has been correctly decided. In the instant case, the house in the heart of the town of Patna has been transferred and it is nobody's case that it is worth less than one hundred rupees. There being no valid transfer of the house in question to the wife, the income from the house was income of the assessee and was assessable in his hands. I would, therefore, answer the question referred in favour of the department and against the assessee. In the circumstances of the case, I would make no order as to costs. SHAMBHU PRASAD SINGH J.--I agree that, on the facts and in the circumstances of the case, the question referred be answered in favour of the department and against the assessee, but would like to make a few observations of my own. The Mohammedan law makes a distinction between hiba (gift pure and simple) and hiba-bil-iwaz (gift for consideration). According to the original concept of the Mohammedan law, h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... doctrine of res judicata does not apply to taxation cases. In face of those authorities, specially of the Supreme Court which are binding on us, it is not possible for me to take a different view, otherwise I was inclined to think that the decision in Sankaralinga Nadar v. Commissioner of Income-tax, AIR 1930 Mad 209 [FB], which has been followed by a Bench of this court in Kaniram Ganpat Rai v. Commissioner of Income-tax [1941] 9 ITR 332 and also by a Bench of the Allababad High Court in Kamlapat Motilal v. Commissioner of Income-tax [1950] 18 ITR 812 holding that the Income-tax Officer is not bound by the rule of res judicata, yet he can reopen the matter only if fresh facts are brought to light which investigation entitled him to come to a conclusion different from that of his predecessor, lays down the correct law. The principle which gave birth to the doctrine of res judicata was that it would not be in public interest to allow the parties to have litigations over the same matter over and over again. If no ban is put on the Income-tax Officer from reopening a matter which already stands decided between the parties, i.e., the department and the assessee, earlier, then there ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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