TMI Blog1993 (11) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... ars 1963-64 and 1964-65 to 1971-72 for which previous years ended on March 31, 1963, and 31st of March in each succeeding year up to March 31, 1971. Income-tax Reference No. 57 of 1983 raises the same question in respect of the succeeding assessment years 1973-74, 1974-75 and 1976-77, Estate Duty Reference No. 1 of 1977 relates to the same property as forming a part of the estate left by the deceased Maharaja Rajendrasinghji. It is necessary to refer in brief to the family history of Maharaja Rajendrasinghji of Rajpipla in so far as it is relevant for the purpose of these references. The deceased Maharaja Rajendrasinghji of Rajpipla state was the elder son of his father, H. H. Maharaja Vijaysinghji. Maharaja Vijaysinghji had two Indian wives and one English wife. Apart from the deceased, Rajendrasinghji, Maharaja Vijaysinghji had two sons, Pramodsinghji and Indrajitsinghji from his Indian wives. He also had one son, Rajsinghji from his English wife Elladevi. Vijaysinghji had executed a will in England on September 4, 1946, under which he had bequeathed certain properties outside India to his English wife. Thereafter, he revoked the will and made another will in England dated Nove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent arrived at between the deceased and the remaining heirs of Vijaysinghji, the entire suit came to be settled and this was under the consent terms of January 28, 1957. The detailed dispositions made under the consent terms of January 28, 1957, have been set out in the order of the Income-tax Appellate Tribunal dated August 9, 1974, in Estate Duty Application No. 123 (Bom) 69-70, which is annexed as exhibit 'C' in Income-tax Reference No. 152 of 1978. What is relevant to note is that certain properties specified in those consent terms were given to the heirs of Vijaysinghji as set out therein. For example Pramodsinghji, one of the sons of Vijaysinghji, was declared absolutely entitled to an immovable property known as "Rajendra Villa" at Rajpipla together with all furniture, fixtures and movables lying therein, and so on. The remaining or residuary property came to the share of the deceased Rajendrasinghji. The consent terms provided that none of the other heirs will have any right, title or interest in respect of the remaining property as also in respect of the privy purse that was being received by Rajendrasinghji and which may be received by his successors to the Rajpipla state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Income-tax Officer who, in his assessment orders, held that the entire income was the individual income of the deceased Maharaja Rajendrasinghji for the assessment year 1963-64 and of Raghubirsinghji for the subsequent assessment years in question. Ultimately, the Income-tax Appellate Tribunal, however, has on the basis of the judgment and the order of the Income-tax Appellate Tribunal in estate duty proceedings, held that the income, inter alia, from Rajpipla Palace will have to be considered as income of the Hindu undivided family of the deceased Maharaja Rajendrasinghji for the assessment year 1963-64 and of the Hindu undivided family of Raghubirsinghji for the subsequent assessment years in question. From these findings of the Tribunal, the following question has been referred to us for determination in Income-tax Reference No. 152 of 1978: " Whether, on the facts and in the circumstances of the case, the income arising from the property called 'Rajpipla Palace' was the income of the Hindu undivided family of which H.H. Rajendrasinghji was the karta and was not the income of H.H. Rajendrasinghji for the assessment year 1963-64 and whether for the assessment years 1964-65 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to succession to the Rajpipla Palace. The Indian will of Vijaysinghji was not probated. It was as a result of the consent decree passed in Suit No. 939 of 1953 and dated January 28, 1957, that Rajendrasinghji, as the heir of his father Vijaysinghji, became entitled to the Rajpipla Palace. The said property, therefore, came into the hands of the deceased Rajendrasinghji in his capacity as an heir of his deceased father as a result of the settlement arrived at between him and other heirs of his deceased father. In these circumstances, since the deceased Rajendrasinghji inherited this property as an heir of his father who died prior to the coming into force of the Hindu Succession Act of 1956, this property will have to be considered as a Hindu undivided family property in his hands, the property devolving on him on the death of his father in April, 1951, before the coming into force of the Hindu Succession Act, 1956. Hence the provisions of the Hindu law as applicable prior to the coming into force of the Hindu Succession Act of 1956 will have to be applied. Rajpipla Palace therefore will have to be considered as a Hindu undivided family property in the hands of Rajendrasinghji dur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of CIT v. P.L. Karuppan Chettiar [1992] 197 ITR 646 (SC). In this case, the Supreme Court considered the case of the deceased who, with his wife, sons and daughter constituted a Hindu undivided family at the time of his death. His heirs including his son succeeded to the properties left by the deceased under section 8 of the Hindu Succession Act, 1956. The question was whether the income from the property coming to the son on the death of the deceased should be assessed as the income of the joint family of the son. The Supreme Court held that the income from the property which was inherited by the son on his father's death was not assessable as income of the joint family. The ratio of these cases would apply to the present case also and the share in the Rajpipla Palace inherited by Raghubirsinghji under section 8 of the Hindu Succession Act, 1956, on the death of Maharaja Rajendrasinghji cannot be considered as a Hindu undivided family property in his hands. Therefore, income from such share in Rajpipla Palace will have to be considered as his individual income. We have to consider the nature of the interest of Raghubirsinghji in the Rajpipla Palace. As Rajpipla Palace was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the commencement of this Act shall cease to have effect with respect to any matter for which provision is made in this Act. Section 5, however, has carved out certain exceptions. Section 5(ii) says that the Hindu Succession Act shall not apply, inter alia, to "any estate which descends to a single heir by the terms of any covenant or agreement entered into by the Ruler of any Indian State with the Government of India or by the terms of any enactment passed before the commencement of this Act." Therefore, under section 4 any custom or usage under which a property devolved by the rule of primogeniture would stand abolished. This, however, will not be the case if under any covenant or agreement between the Ruler of any Indian State and the Government of India, the estate descends to a single heir; or unless there is an enactment passed before the commencement of Hindu Succession Act which provides for descent of any property to a single heir. In the present case, therefore, even if we assume that the property was held by Maharaja Rajendrasinghji in his lifetime as an impartible estate and is liable to devolve by the rule of primogeniture, on the coming into force of the Hindu Succes ..... X X X X Extracts X X X X X X X X Extracts X X X X
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