TMI Blog1978 (2) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of status as according to him such status did not affect either the income or the tax. On further appeal, the Tribunal remanded the matter to the AAC with a direction to decide the question of status. Pursuant thereto the AAC in his turn set aside the assessment and directed the ITO to make a fresh assessment after adjudicating the status. In making the fresh assessment, the ITO again determined the status of the assessee to be an " individual ", inter alia, on the following grounds : (a) Similar claim of the assessee in the assessment year 1952-53 had been negatived by the Tribunal and this was upheld by this court on a reference. (b) A declaration dated the 18th June, 1955, which was relied on by the assessee to establish status as a HUF was not a genuine document. (c) The said declaration did not record that the assessee had impressed his separate property with the character of joint family property. (d) The alleged HUF kept no books of account prior to the 1st April, 1955. On appeal, the AAC held that the declaration was only a reiteration of the earlier stand and, therefore, the status of HUF could not be accepted. But the transfer of shares recorded in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a common hotchpot and were held jointly. The Tribunal next considered the legal effect of the said declaration. The Tribunal held that the preamble thereto contained nothing operative. In any event, by reason of the earlier finding of the Tribunal confirmed by the High Court which was contrary thereto, the said recitals were of little consequence. But construing the operative clauses the Tribunal held that it was established thereby that (a) the assessee had thrown all his self-acquired properties in the common hotchpot of the HUF consisting of himself, his wife and sons and (b) that the shares of the companies were allotted to the members thereof in the course of partial partition and (c) that the remaining assets, that is, house property and share in firms continued to be joint family property and that the HUF was still in existence. The Tribunal, accordingly, set aside the assessment directing the ITO to make the assessment in the status of a HUF in accordance with law. The Tribunal passed another consolidated order in respect of the assessment years 1957-58 and 1959-60 to 1964-65 and, following its earlier order in respect of the assessment year 1956-57, set aside the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t ourselves and the said minors the said shares and the same have already been allotted and made over to each one of us respectively (the said Bhikraj) Jaipuria having accepted on behalf of the minors the shares allotted to them as set forth in parts 1, 2, 3, 4, 5, 6, 7 and 8 of the Schedule hereto and each one of us owns and has seized and possessed of shares respectively mentioned against his name in the aforesaid parts 1, 2, 3, 4, 5, 6,7 and 8 of the Schedule and the others have no right claim or interest therein. I, the said Bhikraj Jaipuria in exercise of all powers enabling me there unto by way of further assurance do hereby confirm the division and transfer of shares as aforesaid ". Mr. B. L. Pal, learned counsel for the revenue, contended at the hearing that the recitals in the said declaration reiterated the original stand of the assessee as to the prior existence of a HUF consisting of the assessee and his other family members. This case of the assessee having been rejected in respect of the assessment year 1952-53 the said recitals could not be held to be correct or true. The other clauses of the declaration linked with the said recitals therefore must also be reje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y and recorded in the document had been excluded from the assessee's total income. There was sufficient evidence to show that the said document was duly executed before a Notary Public and had been acted upon by the assessee. On question No. 2, Dr. Pal contended that the declaration consisted of two parts. In the recitals the declaration sought to record past facts and events, whereas the operative part recorded the present position as regards the assets and the intention of the assessee as to the future user of the same. That the stand taken by the assessee in respect of the assessment year 1952-53 stood wholly rejected was irrelevant in determining the prospective position in the subsequent assessment years. It was unequivocally declared in the document that the properties and assets standing in the assessee's name in fact belonged to HUF. It was also recorded that the assessee had transferred and allotted certain assets to the members of his family. Dr. Pal contended that pre-existence of joint family properties or a nucleus thereof were not necessary to convert self-acquired property into joint family property. By declaration and overt acts the assessee could impress sel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is a Hindu joint family according to the concept of a joint family under the Hindu law. It is, therefore, possible for a main Hindu undivided family to be composed of a large number of branch families, each of the branches itself being a Hindu joint family and so also the sub-branches of those branches .... ' There is nothing in the Hindu law or in the concept of a joint family under the Hindu law which prevent him from throwing his property in the hotchpotch of the smaller unit to which he belongs, while the larger unit remains intact. The ability of the smaller unit to possess Propetty of its own implies that it can have its own hotchpotch and into that hotchpotch can fall properties just in the same manner in which they can fall in the hotchpotch of the main family. Thus, there can be no legal obstruction whatsoever in the way of the assessee, who was possessed of his self-acquired property which he could deal with or dispose of in any way he liked, to give that property not to the entire joint family but to the branch consisting of himself and his children. " (c) CIT v. Pushpa Devi [1971] 82 ITR 7 (Delhi), the Delhi High Court construed the meaning of the word " blending ". ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
