TMI Blog1980 (3) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... kh and which is made a part of the statement of the case as annex. 'B'. Annexure 'B' is a letter addressed by the Raj Pramukh to the Maharaja of Morvi forwarding the inventory and what is called the Darbargadh formula. The inventory prepared shows that some properties were classified as private properties, some were classified as the State properties and the Darbargadh or the city palace was said to be governed by the formula. The relevant part of the formula relating to the Darbargadh provided as follows: "When the Ruler has a Darbargadh or Darbargadhs in addition to his own palace, then his title to and use of them should in my view be settled in the following manner: (a) The legal title should always vest with the dynasty of the Ruler, and the property shall be inalienable and impartible. " In the assessment proceedings, the case of the assessee before the WTO was that a nominal value should be put on the Darbargadh as the same was not readily saleable being a palace used for the residence of the Maharaja of Morvi in succession. He had also contended that the palace was situated in a small town and would not fetch the same price which, it could, if located in the city. Sin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e property, the property must be considered as belonging to the Ruler himself, because the essential incidents of joint family property, viz., the right of a coparcener to ask for a partition of the property and the right of the coparcener to challenge the alienation were absent in the case of an impartible property and reliance . was placed on the observations of the Privy Council in Shiba Prasad Singh v. Rani Prayag Kumari Debi, AIR 1932 PC 216. The learned counsel, therefore, contended that virtually the person who held the impartible property was the owner of the property and must, therefore, be treated as such for the purposes of assessment to wealth-tax. The other limb of the argument of the learned counsel was that the Legislature had amended s. 4 of the W.T. Act by the addition of cl. (6) in s. 4 with effect from April 1, 1965, and this clause inserted by the amendment was really in the in respect of the holder of an impartible property. Section 4(6) reads as follows : " 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. " In any case, according to the learned counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le which was an entity different from the individual, viz., the assessee in the instant case. The controversy involved in this case can be effectively decided, in our view, if the correct nature of the impartible estate is appreciated. There is no dispute that the Darbargadh palace was to be held as an impartible and inalienable property with the result that the assessee was not entitled to alienate it and it was not liable to be partitioned. The concept of an impartible property has been considered by several courts but that concept has been admirably explained by the Privy Council in Shiba Prasad Singh's case, AIR 1932 PC 216, 222 (col. 2), cited supra, as follows : " Impartibility is essentially a creature of custom. In the case of ordinary joint family property, the members of the family have: (1) the right of partition; (2) the right to restrain alienations by the head of the family except for necessity; (3) the right of maintenance; and (4) the right of survivorship. The first of these rights cannot exist in the case of an impartible estate, though ancestral, from the very nature of the estate. The second is incompatible with the custom of impartibilty as laid down in Sar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ouncement of the Supreme Court with regard to the nature of an impartible estate really, in our view, concludes the controversy which is involved in the instant case. Impartible property cannot be treated as the personal property of the assessee at all unless it is artificially included by the Legislature, as it is now contended on behalf of the revenue, by enacting sub-s. (6) in s. 4 of the W.T. Act. We must now consider the argument on behalf of the revenue that s. 4(6) must, be held to be applicable right from the time the W.T. Act came into force because, as pointed out, the contention is that the amendment is-merely declaratory of the prevailing position of law. Shri Joshi has relied on a decision of the Andhra Pradesh High Court in P. V. G. Raj" v. CWT [1970] 78 ITR 601. The Division Bench of the Andhra Pradesh High Court was considering the question whether an impartible property was the individual property of the owner and in that context it was urged before the Andhra Pradesh High Court that the amended s. 4(6) of the W.T. Act was more or less of a declaratory or explanatory nature and this contention was accepted by the learned judges. The learned judges noticed the fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view taken by them with regard to the provisions of s. 4(6) of the W.T. Act apart from the fact that that statement of the law that impartible estate is the individual property of the holder is contrary to the pronouncement of the Supreme Court in Raj Kumar Rukmini Raman Brahma's case, AIR 1971 SC 1687. The deeming fiction in s. 9(4)(a) of the Indian I.T, Act, 1922, and in the corresponding provision in s. 27(ii) is for the limited purpose of determining the income from house property. It is no doubt true that in those provisions income of the holder of an impartible property is fictionally made his income as an individual owner of that property. But it is difficult for us to see how those provisions can be utilised for construing the provisions of s. 4(6) of the W.T. Act when the use of the fiction is made only for a very limited purpose. , The subject-matter of the two enactments and their scope are also different and the two enactments are not at all in pari materia. We also find that there is intrinsic evidence in the amended provision itself which would fully indicate that s. 4(6) could not be construed as a mere declaratory provision setting out the prevalent legal position ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Succession Act. Section 5 of the Hindu Succession Act is not made applicable to It any estate which descends to a single heir by the terms of any covenant or agreement entered into by the Ruler of an Indian State with the Government of India or by the terms of any enactment passed before the commencement of the said Act ". The section was referred to in order to point out that in the matter of succession now, the succession will be governed by the provisions of the Hindu Succession Act unless the estate is of the kind described in s. 5(2). Now, so far as the present case is concerned, the provisions of the Hindu Succession Act do not appear to us to be relevant because in the formula and the inventory it appears that the Darbargadh was to be occupied by the Ruler for the time being and the Ruler alone was supposed to enjoy the property. Since we have reached a conclusion that the impartible property cannot be the property of the Ruler individually before sub-s. (6) was added in s. 4 and it was the joint family property, no question as to the life interest of the assessee in such property can arise for the assessment years prior to 1965-66. It is, however, difficult to see how ..... X X X X Extracts X X X X X X X X Extracts X X X X
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