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TMI Blog1968 (12) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... siness. The statement further shows that Sukhdeo, after having served a jagirdar, started tobacco business under the name and style of Messrs. Sukhdeo Gopikishen at the ripe age of 49 years. At that time, he had four sons. Gopikishen was the eldest son. Some time after, he started money lending business in the name of Sukhdeo Daudas. Daudas was his second son. Various immovable properties were acquired in the joint names of the deceased and his sons out of the profits of these two businesses. On 10th of January, 1941, he executed a deed of partition which is annexure " C ". It purports to record the partition of certain properties--movable and immovable--between the father as party No. 1 and his four sons as parties Nos. 2 to 5. The preamble of the document mentions that " party No. 1 owns movable and immovable properties which have been earned and acquired by party No. 1 only and none else has got a right or share therein ". Then it is stated that party No. 1 had effected the division of the properties amongst parties Nos. 2 to 5 as detailed in the deed. The first paragraph of the deed mentions that party No. 1 had already handed over gold and silver ornaments and other movable pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Board of Revenue held that the entire property including the mortgage deeds formed part of the estate of the deceased and was liable to be charged to estate duty and that the sum of Rs. 26,436 (Rs. 20,000 and the interest thereon) standing in the names of the daughters-in-law of the deceased could not be deducted in computing the principal value of the estate of the deceased. On the application filed by Madanlal on 30th March, 1960, the following questions have been referred to this court for its opinion: " (1) Whether, on the facts and in the circumstances of the case, the Board were correct in holding that the deceased was the absolute owner of the several properties included in the estate ? (2) Whether, on the facts and in the circumstances of the case, the Board were correct in holding that the sum of Rs. 26,436 standing in the names of the daughters-in-law of the deceased, could not be deducted in computing the principal value of the estate of the deceased ? " Notice of the reference was given to the parties and elaborate arguments of learned counsel for the parties were heard. We take up the first question. It is contended by learned counsel for Madanlal, at whose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew business started by the father is joint family business is erroneous, and that its finding that the joint family of which the appellant was a member had an interest in the contract of Krishnaswami could not be supported, as it was based solely on the view which it took of the law. This criticism is, in our opinion, well founded. Under the Hindu law, there is no presumption that a business standing in the name of any member is a joint family one even when that member is the manager of the family, and it makes no difference in this respect that the manager is the father of the coparceners." It has, however, been urged before us that the two major sons contributed to the development of the business when it was started by the father and later on the other two sons, as they grew in age and became majors, also joined that business. But these circumstances by themselves would not make the business started by the father a joint family business. The father was in duty bound to maintain his sons and he must have been keen to train his sons in the business which he carried on. It was thus natural for the sons to assist their father in the business which he carried on. Simply because the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manifested such intention. But the circumstances must be of unequivocal nature. The intention of abandonment of his separate claim and throwing his property in the common stock must be manifested clearly. When we examine the facts of this case, we find that instead of manifesting an intention to treat his property on which estate duty is being levied as joint family property, Sukhdeo clearly asserted in the deed of partition (annexure " C ") executed by him on 10th January, 1941, that all the property which he had movable and immovable had been earned and acquired by him and were owned by him and by none others. While he gave some of his property to his sons, he kept the property mentioned in paragraph 3 of the partition deed to himself. He stated in that paragraph that he was the sole owner thereof and he was at liberty to spend it as he liked whether on charity or by way of gift. It was only after his death that the same shall be equally divided between parties Nos. 2 to 5. Thus, up to the date of execution of this deed, Sukhdeo intended to keep the property mentioned in paragraph 3 as his separate property. It has, however, been urged by learned counsel for Madanlal that therea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on stock with the intention of abandoning all separate claims upon it. But a clear intention to waive the separate rights of the person who acquired the property must be established and that it will not be so inferred from the mere fact of his allowing the other members of his family to reside with him in that property or to use it conjointly with himself." It was a case in which the minor son's name was included in the document of title, namely, Patta obtained by the father for the immovable property purchased by him out of his own funds. But it was pointed out that the inclusion of the minor's name in the document of title did not confer any title on the son unless it was proved that the minor had any independent source of income and the minor's money was utilised in the acquisition of the property. Learned counsel for Madanlal has, however, argued that consideration is not the sole test for the purpose of holding that there has been a blending or that the purchase by a person in the names of others is not benami. For this he has relied on Kanakarathanammal v. V. S. Loganatha Mudaliar. In that case, the consideration had been provided by the husband, but the property was purcha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asonable, or conducive to the peace and welfare of families, to construe acts done out of kindness and affection to the disadvantage of the doer of them, by inferring a gift when it is plain that no gift could have been intended." In our opinion, the acts of Sukhdeo should also be construed in the same manner when he got his sons' names associated in the various mortgage deeds executed by the debtors when they took loan from him. Now we take up the second circumstance into consideration. After the coming into force of the Indian Income-tax Act in the State of Rajasthan, for three years till the death of Sukhdeo in 1954, the income from the properties on which the estate duty is being levied was taxed on the basis of joint family property of the father and his four sons. The argument is that in getting the income so assessed, it must be inferred that after the Income-tax Act had come into force, Sukhdeo started treating the property as the property of the joint family. But the other side of the picture is that it may be that by treating the property as joint family property and filing the returns on the basis of joint family, there was to be a saving in the tax and Sukhdeo might h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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