TMI Blog1996 (2) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... Malifalia, Surat, for a sum of Rs. 74,000 during the previous year relevant to the assessment year 1974-75 in the hands of the respondent-assessee-Hindu undivided family. The accounting period was stated to be ending on March 31, 1974. The assessee named Balubhai Nanubhai has been assessed in the status of a Hindu undivided family in respect of the entire capital gain arising out of the said transaction. Notice under section 148 was issued to Balubhai in the status of the Hindu undivided family. In response to which it was stated that no Hindu undivided family existed consisting of Balubhai Bhupendrakumar and Navinchandra for which notice had been issued. However, three persons filed voluntarily separate returns in their individual capacities. The Income-tax Officer had rejected the claim of the assessee that no Hindu undivided family existed and assessed the income from capital gains in the status of the Hindu undivided family. The facts which have been noticed by the Commissioner of Income-tax (Appeals) and not in dispute, are that the property originally belonged to one Bhagabhai who died leaving behind three sons, Nanubhai, Chunilal and Jinabhai. Chunilal died and his share ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had only a 3/5ths share in the property and the remainder has gone out of the ownership of the Hindu undivided family, hence, capital gains only to the extent of 3/5ths of the asset transferred was liable to tax in the hands of the Hindu undivided family. Portents of claim raised by the assessee on the basis of Magdum's case [1981] 129 ITR 440was that once in a case a male Hindu having an interest in joint family property dies intestate leaving behind a female heir or a male claiming through a female specified in Class I of the Schedule, the Hindu undivided family of which the deceased male was a member is disrupted in its entirety each sharer, coparcener or female entitled to a share or partition, getting an indefeasible right in the joint property, though smaller-Hindu undivided families of the respective coparceners getting a share may come into existence, as a consequence of disruption of the principle of joint tenancy amongst the existing coparceners resulting in destroying the basic characteristic of devolution by survivorship. The Income-tax Officer rejected the contention and taxed the entire capital gains arising out of the aforesaid transaction in the hands of the Hin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SC 716 ; [1987] 163 ITR 31. He further contends that as no partition was in fact claimed by Smt. Maniben her interest in the property continued to remain the property of the Hindu undivided family and cannot be excluded. However, he conceded that in view of the decision of the Supreme Court in CWT v. Chander Sen [1986] 161 ITR 370, the share of the deceased coparcener in the property belonging to the Hindu undivided family which devolved on the heirs and vested in them in their capacity as individuals, the same cannot be treated henceforth a part of the property belonging to the Hindu undivided family and to the extent capital gains relate to the share inherited by heirs the same cannot be said to be a capital gain accruing to the Hindu undivided family on the transfer of the capital asset. However, the same cannot be said in respect of the share which can be deemed to have been allotted to family heirs on the death of a male predecessor until that share is separated actually by volition of parties and a finding to that effect is recorded under section 171. In substance, he submitted that there was only a notional partition on the death of a male member of a coparcener for the purp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i as their separate property to the extent of the deceased's share, and the remainder bearing a different character. This dual char acteristic existed in respect of each parcel of the property. When a male Hindu dies having common interest in coparcenary, the first impact is that the interest of the deceased in coparcenary pro perty devolves in succession and not by survivorship as per the charac teristic of coparcenary property where there is a female heir or male heir claiming through a female heir specified in Class I of the Schedule appended to the Hindu Succession Act. As a consequence of this, the share of the deceased which devolves by succession on his heirs and vests in them ceases to be any more in terest owned by coparcenary or the Hindu undivided family property. As to the remainder, the question that may arise for consideration is whether a deemed partition for the purpose of determining the share of a deceased results in disruption of the Hindu undivided family of which deceased was a member and the coparcenaries having got their shares determined hold the property henceforth as the property allotted on partition for their smaller-Hindu undivided families. However, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion were not entitled to claim partition. The controversy was again raised before the Supreme Court in a different context in Narayan Rao Sham Rao Deshmukhs case [1987] 163 ITR 31. Though the question before their Lordships was whether on the death of a male Hindu a separate unit can be claimed by the wife in respect of the agricultural lands left by the deceased. The Supreme Court drew a distinction between the disruption of the family and a claim to property. As the unit of assessment for determination of the ceiling under the Maharashtra Agricultural Lands (Ceiling on Holdings) Act was the family and family had to be given the meaning as defined in that Act, the court held that notwithstanding the fact of succession, a widow does not cease to be a member of the family and the family has to be taken as a unit as defined under the Maharashtra Agricultural Lands (Ceiling on Holdings) Act, notwithstanding the fact that the shares of the female members had become fixed but simultaneously the court also held that notwithstanding the death of the male member the remaining members of the family continue to hold the properties together. In this context, it is to be seen that in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ale member will acquire an interest by birth. The property is not held by the coparceners as tenants-in-common but as joint tenants. The share which is allotted to a coparcener is ancestral property as regards his male issues. Until partition is effected the right to manage and transact the property vests in karta. Property can be alienated by the karta alone. When property is alienated by the karta, it can be challenged, in certain circumstances, by other coparceners. But a coparcener with whose consent property has been sold, or who has become a party to the sale, cannot challenge such alienation. Female members who otherwise have a right to maintenance have no such right to challenge the alienation of joint property. There is a difference between entitlement to the share on a partition and right to claim a partition. While a coparcener is entitled to claim partition, and get his share separated, a female entitled to a share has no such right to claim partition under customary Hindu law. This position can be said to have been altered as per decision of the Supreme Court to the extent that in case a Hindu male having an interest in Hindu coparcenary dies intestate, leaving a fem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n partition, it remains an integral part of the joint property. In case a female dies before partition and actual allotment takes place, it remains available for division amongst the remaining members of the family. This is so even where entitled a female to share after filing a suit for partition. Reference in this connection may be made to Sheo Dyal Tewaree v. Judoonatlt Tewaree [1868] 9 WR 61. The court said : " The text of the Mitakshara that has been referred to merely says of heirs dividing after the death of the father, let mother also take a share' or in other words the mother or grandmother as the case might be, is entitled to a share when sons or grandsons divided the family estate between themselves. But mother or the grandmother can never be recognised as owner of such a share until the decision has been actually made. " In Beti Kuar v. Janki Kuar [1911] ILR 33 All 118, the Allahabad High Court held : " No doubt under the Mitakshara upon a partition being made by sons after the death of their father the mother isentitled to a share equal to that of a son. But we are of opinion that she would obtain such share only if an actual partition took place between the so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erned, the Supreme Court had not made any such distinction between the rights of male or female participants on partition. If without actual physical partition such shares attributable to males is to be treated to be the property of existing Hindu undivided family, there is no reason to exclude such share attributable to females from the common hotchpotch until actual partition takes place. Otherwise, the consequence will be wholly incongruous. In this view of the position of a female member vis-a-vis her right to a share in the joint family property it must be held that unless such female member voluntarily lays a claim to allotment of share as a result of partition to herself and specific property is actually allotted to her the notional share to which she can lay claim remains an integral part of the property of the Hindu undivided family capable of division. The right to manage and deal with joint family property also vests in the karta until partition takes place. Her notional interest cannot be excluded for computing the capital gains arising out of sale of any part of the joint family property sold by the coparceners, before its partition takes place. So far as the exclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... until on a claim made by the assessee a finding about partition has been recorded. The precondition for applicability of section 171 is that a Hindu undivided family ought to be an assessee as such and it is only if such an assessee in a subsequent period claims any partition, partial or complete, it cannot be recognised unless a finding to that effect has been recorded. However, from the facts of the present case we do not find anything on record suggesting that Shri Balubhai Nanubhai was already an assessee in the status of the Hindu undivided family consisting of five members stated in the order of the Income-tax Officer, namely, the three brothers, father and mother. Therefore, in the absence of any such material to suggest that the assessee was already being assessed as a Hindu undivided family, the question cannot be examined whether in terms of section 171, a finding as to partition was necessary to be recorded before the Hindu undivided family could be held to have been disrupted. In the absence of a person being already assessed as Hindu undivided family if a claim is laid for the first time that no Hindu undivided family existed, it had to be decided as per the existing l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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