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TMI Blog1973 (12) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... s inherited in this manner from his father, kishandas, was ancestral property in his hands and during the material account years it belonged to the Hindu undivided family consisting of Gordhandas and his son as coparceners, and his wife and a daughter as members of it. Gordhandas also received some property from Sir Manmohandas in two different modes. On 25th February, 1927, Manmohandas made a settlement of certain immovable properties in favour of his three sons. The trust deed provided that income was to be paid to the settlor during his lifetime, and on his death the trustees were to make over, transfer, assign and assure the trust property to the sons of the settlor as tenants-in-common in equal shares for their own absolute use and benefit. A copy of the deed of settlement has been annexed to the statement of the case as annexure " A ". However, during the lifetime of Manmohandas, Kishandas died on 4th February, 1930. On his death by a further deed made on 17th March, 1930, the original trust settlement stood amended and by the amendment it was provided that the portion going to Kishandas on the settlor's death would be held in trust for Gordhandas during his minority and wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the status of an individual and relating to income from the remaining two sources. It was claimed that two separate assessments should be made upon Gordhandas in two different capacities in respect of income mentioned in the two returns. The Income-tax Officer by his assessment order dated 31st January, 1962, rejected the assessee's contention in this behalf, holding that although the property which Gordhandas had received under the trust settlement and the will of his father might be separate properties, he had blended them all and thrown the entire income in the common stock. In this view of the matter the Income-tax Officer completed the assessment by including income from all these assets in the status of Hindu undivided family for each of these two assessment years. The assessee, thereafter, appealed to the Appellate Assistant Commissioner, who considered the principles of Hindu law as set out in Mulla's Hindu Law and came to the conclusion that the Income-tax Officer was not justified in holding that there had been blending of the income from the separate property and the ancestral property of the assessee to render income from all the properties liable to be assessed as i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eally wanted to make a gift of the property to his son or the apparent gift was only an integral part of the scheme to partition the same. It was observed that there was no presumption that he intended the one or the other. Mr. Joshi then took us through the relevant portion of the trust deed dated 25th February, 1974, and of the will dated 23rd February, 1930. The trust deed clearly enjoins the trustees to pay the net balance of such rents, interest, dividends, income and profits to the settlor during his lifetime for his own absolute use and benefit, and on and after the death of the settlor to make over, transfer, assign and assure the trust property to the sons of the settlor as tenants-in-common in equal share for their own absolute use and benefit. In Arunachala's case the Supreme Court has observed that the interest which the son would have in such property would depend upon the terms of the grant. In my view the terms of the grant under the deed of trust dated 25th February, 1927, are clear and unequivocal and admit of no ambiguity. After the death of the settlor the sons of the settlor are to receive in equal shares the net rents, interest, dividends, income and profits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itate against the view canvassed by Mr. Joshi. Accordingly, it must be held that these two categories of assets received by Gordhandas, viz., the assets attributable to the trust deed dated 25th February, 1927, and clause 12 of the will dated 23rd February, 1930, were his separate properties as distinguished from the shares inherited by him from his father, which admittedly were ancestral properties. The question which now remains to be considered is whether by his subsequent conduct the assessee had treated these properties as Hindu undivided family properties. Before the Tribunal the departmental representative relied on the following circumstances in support of his contention : (a) that no separate books of account have been kept for any of the separate sources of income (b) the same bank account which stands in the name of the assessee, his wife and his widowed mother had been credited with all moneys received from these assets as well as all moneys received from the personal business conducted by the assessee ; (c) the cash book maintained does not make any distinction between the different kinds of receipts, and (d) the assessee's ledger contains two ledger accounts : ( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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