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TMI Blog1968 (10) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... reafter being assessed in his individual capacity. Again, on May 1, 1946, the house properties belonging to the family, which had not been partitioned earlier, were partitioned among the brothers. This partition was also recognised by the revenue and assessments were, thereafter, made on the assessee as individual. With respect to the assessment years 1957-58, 1958-59 and 1959-60, the assessee filed returns in his individual capacity but later revised the same claiming that he should be assessed in the status of a Hindu undivided family. The family was stated to consist of the assessee, his widowed mother, wife and two unmarried daughters. The assessee having lost before the Income-tax Officer and the Appellate Assistant Commissioner preferred an appeal to the Tribunal only in respect of the assessment year 1959-60. The Tribunal held : " The expression used in the Income-tax Act is ' Hindu undivided family ' and not 'coparcenary'. A Hindu coparcenary is a much narrower body than the Hindu undivided family. It includes only those persons who acquire by birth an interest in the joint or coparcenary property. These are the sons, the grandsons, and great-grandsons of the holder of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h's mother was a member of the family along with him. I will, however, deal with the other aspect of the case also and determine the status by excluding the widow of Bawa Dinga Singh. Mr. Kirpal, the learned counsel for the revenue, principally relied on a decision of the Privy Council in Kalyanji Vithaldas v. Commissioner of Income-tax. In this case a firm was started by Moolji and Purshottam (brothers who had separated) and Kalyanji (not related to either). In 1919 Moolji made gifts of capital to each of his sons by his first wife, namely, Kanji and Sewdas. Till 1919, Moolji, Kanji and Sewdas were separate from each other. In 1919, Kalji and Chaturbhuj were taken into the partnership. In 1930, Sewdas and Kalyanji's brother, Champsi, were taken into the firm. The interest of Kanji and Sewdas was a gift from their father Moolji, and that of Chatturbhuj a gift from his brother, Kalyanji. The decision proceeded on the finding that it had not been proved that any individual partner had thrown his interest in the firm or receipts therefrom into the common stock. Dealing with the cases of Kanji and Sewdas their Lordships of the Privy Council assumed that their interest was ancestral pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of all such facts, his personal law regards him as the owner, the property as his property and the income therefrom as his income, it is chargeable to income-tax as his, i.e., as the income of an individual. In their Lordships' view it would not be in consonance with ordinary notions or with a correct interpretation of the law of the Mitakshara, to hold that property which a man has obtained from his father belongs to a Hindu undivided family by reason of having a wife and daughters." If a property belonged at one stage to a Hindu undivided family and that family, by reason of certain circumstances, is reduced to a single coparcener and some female members it will continue to be a joint family property is now settled beyond dispute by the decision of their Lordships of the Supreme Court in Gowli Buddanna v. Commissioner of Income-tax . In that case Buddappa, his wife, his two unmarried daughters and his adopted son were members of a Hindu undivided family. Buddappa died on July 9, 1952. During his lifetime Buddappa was assessed with respect to the business of the family in the status of a manager of the Hindu undivided family. For the assessment year 1951-52 (accounting period e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mitakshara school of Hindu law. The undivided son died in 1934, and Arunachalam became the sole surviving coparcener in a Hindu undivided family to which a number of female members belonged. Arunachalam died in 1938. The widows had the power to adopt sons and that power was exercised after the death of Arunachalam. It was held that Arunachalam was at the time of his death a member of a Hindu undivided family the same undivided family of which his son, when alive, was a member, and of which the continuity was preserved after Arunachalam's death by adoption by the widows of the family. The judicial Committee observed : " ....... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot done and the assessee cannot base its claim on that. The assessee revised his returns for the years 1957-58 to 1959-60, but that was done after the assessment year so that the assessee cannot say that revision of the returns was an unequivocal expression of the intention to throw the property in the common stock. My answer, therefore, is that the business in the hands of the assessee was that of the family consisting, inter alia, of Bawa Arjan Singh and his widowed mother. I will now proceed to answer the question on the assumption that the assessee's mother also separated as urged by Mr. Kirpal (though there is no material on the record pointing towards that). The position, in my opinion, will not be any different even in those circumstances. In C. N. Arunachala Mudaliar v. C. A. Muruganatha Mudaliar, their Lordships of the Supreme Court held that the property of the grandfather would normally vest in the father as an ancestral property if and when the father inherited the propertv on the death of the grandfather or received it, by partition, made by the grandfather himself during his lifetime. On both these occasions, the grandfather's property would devolve on the father by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ided family, startling results may ensue. As soon as he gets a son or adopts a son, the property will become the property of a Hindu undivided family. If that son happens to die, the property will then become the property of an ' individual ' until another son is either born or adopted. We will thus have a bewildering complexity as regards the status of an assessee which would vary from time to time. The safer test seems to be, as pointed out by the Privy Council in the Ceylon case , whether there is a potentiality of a coparcener being brought into existence either by law or by nature. So long as that potentiality is there, the property must be held to be that of a Hindu undivided family. Such a potentiality exists in the case of a sole surviving coparcener, because either he may beget a son or adopt a son. It also existed while the property was in the possession of a Hindu widow prior to the Hindu Succession Act of 1955, because by making a valid adoption she could continue the original joint family. It is true that in the Orissa case, it was pointed out that when she becomes the full owner of the property by virtue of the Hindu Succession Act, the aforesaid potentiality disappea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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