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TMI Blog1971 (1) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee, Shrimati Pushpa Devi, but was the income of her Hindu undivided family ? The facts are not in dispute and may be stated as follows : Shrimati Pushpa Devi, an individual, is the assessee. The statement of the case relates to the assessment year 1963-64. The previous year ended on March 31, 1963. The assessee is a member of the Hindu undivided family consisting of her husband, Kanwal Narain Khanna, her father-in-law, Gurnarain Khanna, her mother-in-law, Kando Devi, and her minor son, Ravi Narain Khanna and her three daughters, Rajni, Rama and Madhu. The assessee in her individual capacity and with the aid of her personal funds entered into a partnership with her father-in-law, Gurnarain Khanna, on June 19, 1958, in the name and style of Gurnarain Jagat Narain and Co. Her minor son, Ravi Narain, had been admitted to the benefits of this partnership. Each of them had 1/3rd share in the profits and the assessee and Gurnarain had equal share in the loss, if any. The aforesaid firm owned and ran two cinema theatres, one known as Nishat Talkies, at Kanpur and the other known as Novelty Talkies, at Lucknow. Separate water-tight accounts were being kept in respect of these two b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kanpur, shall cease to be my self-acquired or separate property and the ownership, enjoyment and possession of the same shall vest only with the said Hindu joint family to be enjoyed by it exclusively, solely and wholly hereinafterwards." Rupees 20,865 being the 1/3rd share of the income from the business of Nishat Talkies for the year under reference, was credited to the account of the assessee, in the books of the firm of Gurnarain Jagat Narain and Co. The assessee, a Hindu undivided family, paid advance tax in respect of this amount of income and also filed its return in respect thereof. The assessee on the Other hand did not include this income in her return for the year under reference, but made the following note in part 1, section thereof : Share of income from Nishat Talkies, Kanpur, Rs. 20,865. Please see note on back page of computation of assessable income." The said note oh the back page of the return read as under : " By a declaration dated 1st September, 1961, the assessee threw into the Hindu joint family hotch-potch, Gurnarain Khanna & Sons, her 1/3rd share in the profit and loss of Nishat Talkies, Kanpur, also owned by Messrs. Gurnarain Jagat Narain & Co., part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nded that she had by her unequivocal expression of intention impressed her personal property, viz., 1/3rd share in the Nishat Talkies business, with the character of coparcenary property. He contended that the doctrine of Hindu law did not make any distinction between a coparcener and a member, male or female, and that any member of joint family, be it a male or female, could impress his or her personal property with the character of joint family property. She further contended that it was not necessary that the joint family should own any nucleus of joint family property before any member of the family could so convert his personal property into joint family property. In support of her stand she referred to the fact that the Gift-tax Officer had held that the conversion by the assessee of her 1/3rd share in the Nishat Talkies business into joint family property amounted to a gift of her interest in the business in favour of the joint family and had subjected the said transaction to gift-tax on that basis. The revenue, on the other hand, contended that it was the privilege of only a male coparcener of a Hindu undivided family to convert his personal property into joint family prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emale so far as this rule of Hindu law is concerned. The contention that prevailed with the Tribunal was that there appeared to be no apparent reason or justification for discriminating against a Hindu female on the ground of sex in the matter of this judgemade law, which especially does not enlarge her rights or improve her status or position but only enables her to relinquish her absolute property in favour of her joint family. The rule does not entitle her to advance any claims unknown to Hindu law, but only enables her to surrender and sacrifice her own interests in the property in the larger interests of the joint family. It was contended that the position was not foreign to the genius of Hindu law. There is a very close parallel to this position in Hindu law which has now been well established and recognised, viz., that a female in Hindu law can, by her unequivocal expression of intention, make her absolute personal property a part of the estate of her deceased husband. The position that a Hindu widow can impress her personal property with the character of the personal property of her husband's estate which can become joint family property in the event of her making an adopti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y property and who owns separate property of his own may by deliberate and intentional conduct treat his separate property as forming part of the coparcenary property. If it appears that property which is separately acquired has been deliberately and voluntarily thrown by the owner into the joint stock with the clear intention of abandoning his claim on the said property and with the object of assimilating it to the joint family property, then the said property becomes a part of the joint family estate ; in other words, the separate property of a coparcener loses its separate character by reason of the owner's conduct and gets thrown into the common stock of which it becomes a part. This doctrine, therefore, inevitably postulates that the owner of the separate property is a coparcener who has an interest in the coparcenary property and desires to blend his separate property with the coparcenary property. " The above passage makes it clear that a person who is not a coparcener has no right to throw her separate property into the joint property. It is also evident from the above passage that before this rule of blending can come into play there must also exist coparcenary property ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t ordinarily be regarded as an admission of a legal obligation. On behalf of the assessee, strong reliance has been placed on the use of the language " separate or self-acquired property of a member of a joint Hindu family " and it is contended that if the doctrine of blending was applicable to a coparcener then there is no reason why the words " a member of a joint Hindu family " were used. It is not disputed that a female Hindu is undoubtedly a member of the joint Hindu family although she is not a coparcener and if the self-acquired or separate property of a male member of the family can be blended with the joint property of the family, it may as well be the property of a Hindu female who is as much a member of the family as the male. It is no doubt true that the coparcenary property is subject to survivorship while the separate and self-acquired property of a member is subject to succession ; but when the latter property is blended with the family property and is, therefore, impressed with the character of that property, the rule of succession gives place to the rule of survivorship. The male coparcener whose self-acquired or separate property is thrown into the joint family ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Mallappa which was primarily concerned with the property owned by a Hindu female from her father and thus the law applied to the separate property of the female or that in which she was to be regarded as a limited owner. But what happens to the property of which the Hindu female is an absolute owner ? There is nothing in Mallesappa's case about such property. It appears to us that there is no substance in this argument. The passage in that case clearly states that, where members of a joint family who have control over the joint estate, and those members can be coparceners alone, blend with the family estate the property in which they have separate interests, the effect is that all the property so blended, becomes joint family property. The passage, therefore, clearly makes out the case of a coparcener blending his separate property with the family property and not of a Hindu female wanting to do so. Counsel for the assessee conceded that once the separate property of a Hindu female is thrown into the joint family hotch-potch, she and her heirs will lose all their rights in that property. According to the learned counsel, she will have her right of maintenance and if there is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eral rules for succession to the property of a male Hindu in sections 8 to 13 including the rules relating to ascertainment of the shares and portions of the various heirs. It is a part of this scheme to enact in sections 15 and 16 separate general rules affecting succession to the property of a female dying intestate. Sections 18 to 28 are headed "General provisions relating to succession" and lay down rules which are supplementary to the provisions in sections 5 to 17. The rules laid down in those sections are not merely explanatory of the general rules for succession. Some of them enact substantive provisions involving legal principles. The effect of some of these provisions is to abolish the Hindu women's limited estate and any property possessed by a female Hindu, howsoever acquired, is held by her as her absolute property and she has full power to, deal with it or dispose of it by will as she likes. The restraints and limitations on her power have ceased to exist even in respect of existing property possessed by her at the date of the Hindu Succession Act coming into force whether acquired by her before or after the commencement of the Act. Subject to some limited reservation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amily stock. The augmentation in that case was as forming part of the original stock and an accretion to it and in such augmentation the acquirer does not get any extra share for his special exertions. The real test of blending was thus laid down by the Privy Council in Rajani Kanta Pal v. Jaga Mohan Pal, where it Was held : " Where a member of a joint Hindu family blends his self-acquired property with property of the joint family, either by bringing his self acquired property into a joint family account, or by bringing joint family property into his separate account, the effect is that all he property so blended becomes a joint family property." According to the Tribunal, there is no apparent distinction between "accretion" to the property and "blending" and it is observed that if a woman can impress her personal property with the character of the property of her husband's estate which is in her possession, and can convert it into a joint family property, what is there that prevents her from doing so in the case of her personal property, to her own disadvantage and at personal sacrifice? The distinctive feature of a woman's estate is that, at her death, it reverts to the heir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re-acquiring what was the husband's estate, the acquired property becomes part of the husband's property (see Yellavajjhula Surayya v. Tummalapalli Mangayya). All these are, however, cases of accretion to the estate. They look very much like blending but are actually cases of augmentation of the original estate by means of accretion. There can be no doubt about the power of the widow to augment that estate. By adding to that estate she still retains the complete power of disposal over the income. In the case of blen ding she loses all her control over the property including the income from that property. In Mallesapp's case, it was said by the Supreme Court that a Hindu female holding property as a limited owner cannot circumvent the rules of surrender, and allow the members of her husband's family to treat her limited estate as part of the joint property belonging to the said family. The property has to devolve on the next reversioner. In the case of her self-acquired and separate property which will now include the property that comes into her hands under section 14 of the Hindu Succession Act, she no doubt has the complete power of disposal. The question, however, is whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ention to treat his self-acquired property as that of the joint family property, the property assumes the character of joint family property. The doctrine of throwing in-to the common stock is a doctrine peculiar to the Mitakshara school of Hindu law. When a coparcener throws his separate property into the common stock, he makes no gift under Chapter VII of the Transfer of Property Act. In such a case there is no donor or donee. Further, no question of acceptance of the property thrown into the common stock arises." This again lends support to the view that it is only the action of a coparcener which can be characterised as blending his property with the coparcenary property. The next question which according to the revenue is that the process of conversion of personal property into the joint, family property is not possible unless the joint family owns such property. It is an admitted proposition before us that the assessee's joint family did not own any property as such. The contention urged on behalf of the revenue is based on the judgment of the Supreme Court in Mallesappa's case, where it was said that the basis of the doctrine of blending was existence of coparcen ary and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bolla Rattain. A Division Bench of the Bombay High Court reaffirmed this view in the case of Damodar Krishnaji Nirgude v. Commissioner of Income-tax in which it was said : " Now, in our view, possession of ancestral or joint family property under the Hindu law is not a condition precedent for enabling a coparcener to impress his self-acquired property with the character of a coparcenary property. What constitutes impressing self-acquired property with the character of a coparcenary property is the unequivocal act on the part of the coparcener to abandon his individual exclusive right in the property in favour of the coparcenary. It is a well-known principle of Hindu law that a coparcenary can exist even though it may own no coparcenary property. When a coparcenary can exist without possessing or owning coparcenary property, there is no reason why a coparcener could not be in a position to abandon his rights in his self-acquired property in favour of the coparcenary. It is his right under the Hindu law on the exercise of which the property assumes the character of the coparcenary property." In view of the unanimity of the views of different High Courts on this point we are prepare ..... X X X X Extracts X X X X X X X X Extracts X X X X
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