TMI Blog1967 (8) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... n respect of the land and properties acquired by the Government, have been rightly included in the net wealth of the assessee ?" The material facts are that at the time of a partition effected between the assessee, his wife and his two sons by a registered deed dated the 3rd October, 1955, Smt. Ramkunwarbai, the assessee's mother, was given one thousand shares of the Perfect Potteries Co. Ltd., Jabalpur, and some land situated in Mankhedi, Tehsil Patan, District Jabalpur, for her maintenance. The material portion of the partition deed dealing with this matter ran as follows : "I am a Marwadi Vaish following Vallabh Kul Sanuday Principles. I am governed by the Mitakshara Act which is applicable to Hindus of our community. Hence I am responsible for looking after my mother alone during her lifetime about which I have always been vigilant. Therefore I have transferred 1,000 preference shares of the Perfect Pottery Co. Ltd., Jabalpur, in her name at the time of partition of the movable property with her consent and now by virtue of this agreement I further give her the land measuring 102.39 acres in village Mankhedi, Tehsil Patan, District Jabalpur, the yearly rent of which is Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entitled to the compensation payable in respect of the said property, or if the Government has to pay any compensation to any other person the owner shall refund to the Government the payments made hereunder and shall otherwise indemnify the Government against any loss or damage suffered by the Government by reason of any fault or defect in his title as represented by him without prejudice to any other remedies for the enforcement of any refund and indemnity, the Government may recover any sum payable by way of refund and indemnity as arrears of land revenue." The Wealth-tax Officer included the amount of Rs. 1,56,471 also in the net wealth of the assessee for the relevant year. The assessee claimed that the amount of Rs. 1,56,471 received by him was really a liability, inasmuch as his claim for compensation still remained unascertained and the amount was refundable to the Government in a certain contingency and, therefore, should, as a part of his total liability, be excluded from the computation of his net wealth. This claim was rejected by the Wealth-tax Officer as well as by the Appellate Assistant Commissioner and the Appellate Tribunal before whom it was repeated in appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erties ; that, therefore, the shares did not revert to the joint Hindu family ; and that under section 15 of the Hindu Succession Act, 1956, Seth Narsinghdas, as the son of Smt. Ramkunwarbai, inherited the shares after her death. In our judgment, it is plain from the language of paragraph 3 of the partition deed and the dispositive words employed therein that at the time of partition between Seth Narsinghdas, his wife and his sons, Smt. Ramkunwarbai got one thousand shares of the Perfect Potteries Co. Ltd. and some land absolutely and not merely the right to enjoy the income and profits of the properties given to her. That Smt. Ramkunwarbai got not merely the right to enjoy the usufruct but the corpus itself becomes clear enough from the expressions : " Therefore, I have transferred 1,000 preference shares of the Perfect Pottery Co. Ltd., Jabalpur", and "now by virtue of this agreement I further give her the land". It is also worthy of note that after the partition Smt. Ramkunwarbai's name was entered in respect of the shares and the land given to her and the value of the shares was included in the wealth-tax assessment of Smt. Ramkunwarbai. The contention of the learned counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... became the full owner of the property by virtue of section 14 of the Hindu Succession Act, 1956. Before examining section 14, it is necessary to consider whether Smt. Ramkunwarbai was entitled to a share in the partition that took place between her son, Seth Narasingdas, his wife and his sons. On the question whether a paternal grandmother is entitled to a share when a partition takes place between her son and his sons, divergent views have been expressed by the High Courts of Allahabad, Bombay, Calcutta and Patna. It has been held in Sheo Narain v. Janki Prasad and Jamnabai v. Vasudeo Sagarmal that she is not entitled to a share. The view of the High Courts of Calcutta and Patna, as expressed in Badri Roy v. Bhugwat Narain Dobey and Krishna Lal Jha v. Nandeshwar Jha is that she is so entitled. It is not necessary to examine all these decisions. So far as this court is concerned, the view taken in Rambhau Krishnajee v. Bala Punjaji, where, following the decision in Badri Roy v. Bhugwat Narain Dobey it has been held that the paternal grandmother is entitled to a share in a partition between her son and his sons, must be followed unless there are cogent reasons for departing from it. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roperty in question, and that document or instrument contains terms restricting the estate taken by her, then by virtue of sub-section (2) of section 14 the applicability of sub-section (1) and the Explanation thereto is ruled out. Now, here, sub-section (2) of section 14 is not attracted. The reason is that Smt. Ramkunwarbai had a right to a share in the partition between Seth Narsinghdas and his sons. That being so, if any property was allotted to her in the deed of partition, it cannot be held that there was acquisition of that property by her under the partition deed. She had a subsisting title to the totality of the property of the family. What the partition deed effected was to transform the joint title into separate titles of the individual members of the family in respect of the several items of the property allotted to them respectively. The decision of the Supreme Court in Sarin v. Ajit Kumar Poplai, as also of this Court in Tribhuwandas v. Premchand, shows that when a member of a joint family gets an item of property in a partition, there is no acquisition by him of that property by transfer. It is true that the terms of the partition deed proceeded on the footing that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... holding in deposit the amount of Rs. 1,56,471 for the Government, or postponed to any future date his right of ownership to that money. Nor did that clause make the amount of Rs. 1,56,471 received by Seth Narsinghdas as owner, a liability of his. In the case of a contract of indemnity, the indemnifier cannot be called on to make good his promise until the indemnified has incurred actual loss (see Rangnath v. Pachusao). It is not the case of the assessee that he incurred a liability to refund Rs. 1,56,471 to the Government in the year for which he is being assessed to wealth-tax. If he did not incur that liability, then, it cannot be held that the amount of Rs. 1,56,471 constituted a debt owed by the assessee to the Government on the valuation date. Under section 2(m) of the Wealth-tax Act, 1957, all debts owed by the assessee on the valuation date other than the debts enumerated in section 2(m), are to be deducted in computation of the net wealth. The contingent liability arising under clause 3 of the agreement for payment of the compensation amount received by the assessee is clearly not a debt owed by the assessee to the Government on the valuation date. The Tribunal was, theref ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
