TMI Blog1984 (1) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... re includible in his wealth in accordance with section 4(1)(a) of the Wealth-tax Act in the wealth of the assessee who is an individual ? " The facts and circumstances in which this reference arises may be briefly stated. The respondent, Prithvi Singh, who will hereinafter be referred to as " the assessee ", was the holder of an impartible estate known as the jagir of Bisalpur, situated in district Pali in the State of Rajasthan. The jagir was said to have been granted to the forefathers of the assessee more than 300 years ago and succession to the jagir was governed by the rule of primogeniture. Thus, the jagir was ancestral and passed by succession to the senior member in the main line of the original grantees. The jagir of Bisalpur was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, jodhpur, held that the jagir bonds received by the assessee in lieu of resumption of jagir were in the nature of impartible property and the assessee could neither partition the same nor could he give away a part thereof by way of gift, but the transferred amounts should be considered to be the wealth of the assessee. On a further appeal preferred by the assessee before the Income-tax Appellate Tribunal, Jaipur Bench, Jaipur (hereinafter called " the Tribunal "), it was held by the Accountant Member that there was no material on the record to support the claim of the assessee that the impartible estate in respect of which the assessee was assessed as an individual, really belonged to a Hindu undivided family, of which the assessee was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder of the Tribunal dated February 22, 1974, to this court. As stated above; the Appellate Tribunal has referred the: question reproduced above to this court by its order dated September 27, 1974. The law on the subject is well settled that the jagir though impartible was not an absolute property of the jagirdar but it belonged to his Hindu undivided family. It has been held by this court in Thakur Gopal Singh v. CWT [1975] 99 ITR 354, that the compensation payable under the Rajasthan Land Reforms and Resumption of Jagirs Act, 1952, was also joint family property and was not the self-acquired or separate property of the ex-jagirdar. It was also held in the aforesaid case that the compensation awarded on the resumption of the jagir to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... succession and an intention to impress upon the impartible estate, the character of separate property. In the present case, on receiving the jagir bonds in lieu of compensation for the resumption of the jagir lands, the character of impartibility was lost, because the sale price of the jagir bonds was partitioned amongst the members of the joint Hindu family. The jagir bonds were undoubtedly joint family property and so was the amount received as a result of the sale thereof. But that amount was partitioned on November 4, 1964, by the assessee among himself, his wife and two minor sons. Thus the character of impartibility having been lost, the shares out of the amount received on sale of the jagir bonds which were transferred to the wife ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere is clear evidence that the character of impartibility ceased to exist, as the assessee himself relinquished the right by dividing the price obtained as a result of the sale of the jagir bonds by partition among the members of the joint family. The case of the Revenue is that because of the provisions of sub-section (6) of section 4 of the Act, a legal fiction has been created and the impartible estate should be deemed to be the property of the assessee as an individual. Section 4(6), which came into force from April 1, 1965, runs as under : " For the purposes of this Act, the holder of an impartible estate shall be deemed to be the individual owner of all the properties comprised in the estate." There is no doubt that on account o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der section 4(1)(a) of the Act. It may be pointed out that in the Income-tax Act, there was already a provision raising a legal fiction in respect of income arising out of house property in section 4(1)(a) of the Indian Income-tax Act, 1922, and thereafter in section 27(ii) of the Income-tax Act, 1961 ; but there was no similar provision in the Wealth-tax Act until March 31, 1965. As we have already observed above, at the time when the provisions of section 4(6) were introduced in the Wealth-tax Act with effect from April 1, 1965, there was no impartible estate of the assessee in existence and, therefore, the question of deeming such an estate as a separate property of the holder of the impartible estate could not arise. In this view of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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