TMI Blog1973 (10) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... running a business. By a deed called a "release deed" on November 10, 1956, Gautamkumar relinquished his interest in only one of the joint family assets, the joint family business run by the family. Shantikumar died on September 1, 1961. But, prior to his death Shantikumar had executed a will dated February 22, 1960, and by this will he bequeathed his share in the Hindu undivided family property including his share in the business and the bequest was in favour of his wife and his two sons, Gautamkumar and Bhadrakumar, and all the legatees were entitled to share in the bequest equally. On September 11, 1961, a document was executed. By this document, Gautamkumar released his right, title and interest in the business in favour of the other two legatees, namely, Kalavati and Bhadrakumar. The document in terms mentions that Gautamkumar who was described as a party of the second part was releasing all his right, title and interest as an heir of Shantikumar Jagabhai in the joint family firm and he had no claim or demand whatsoever in the goodwill, trade name, assets, liabilities, outstandings and stocks of the said firm and the parties of the first part, that is, Kalavati and Bhadrakumar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 171(2). The appellate officer also held that there was a partial partition of the Hindu undivided family business and, therefore, the income of the business carried on by the Hindu undivided family by virtue of the partnership could not be treated as income of the Hindu undivided family. Thereafter, the Income-tax Officer filed an appeal against the order of the Appellate Assistant Commissioner before the Income-tax Appellate Tribunal and the Tribunal held that the Appellate Assistant Commissioner was right in holding that the claim was made for partial partition. The Tribunal also held that after the release deed of November 10, 1956, there were two coparceners entitled to the Hindu undivided family business, namely, Shantikumar and minor, Bhadrakumar. The Tribunal held that at the time of Shantikumar's death on a notional partition as contemplated by the Explanation to section 6 of the Hindu Succession Act, Shantikumar's share would be one-third and under section 30 of the Hindu Succession Act, the right, title and interest in the Hindu undivided family property can be willed away by a coparcener. Shantikumar was entitled to will away his one-third share in the Hind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... attained majority and it was held that the revenue could not object to the transaction being given effect to. Thereafter, the question hereinabove set out has been referred to us at the instance of the revenue. Before we proceed further, it will be necessary to set out certain paragraphs from the so-called release deed of September 11, 1961. This release deed was executed between two parties. The parties of the first part were Kalavati and Bhadrakumar by his guardian, Kalavati on the one hand and the party of the second part was Gautamkumar. The fourth recital in paragraph 1 is in these terms : " AND WHEREAS there has been a partial partition between the two parties of the first part, namely, Smt. Kalavati Shantikumar Sheth and minor Bhadrakumar Shantikumar Sheth, of the business as hereinafter appearing wherein the said two parties have become partners in the firm of Bipinchandra Gautamkumar in their separate capacities; AND WHEREAS the party of the second part does not want to continue such business, it is hereby agreed between the parties hereto as follows:". In paragraph 3 it is mentioned: " AND WHEREAS as the parties of the first part desire to carry on the said b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , in accordance with the provisions of the Indian Succession Act, 1925, or any other law for the time being in force and applicable to Hindus. The Explanation to section 30 mentions that the interest of a male Hindu in Mitakshara coparcenary property shall, notwithstanding anything contained in the Hindu Succession Act or in any other law for the time being in force, be deemed to be property capable of being disposed of by him or by her within the meaning of this sub-section. Thus, with the coming into force of the Hindu Succession Act, 1956, it became possible for any Hindu to make a will to dispose of his interest in Mitakshara coparcenary property but such testamentary succession is governed by section 6 of the Act. Under section 6 of the same Act, when a male Hindu dies after the commencement of the Succession Act, having at the time of his death an interest in Mitakshara coparcenary property, his interest in the property shall devolve by survivorship upon the surviving members of the coparcenary and not in accordance with the provisions of the Hindu Succession Act. But under the proviso to section 6, if the deceased male Hindu leaves him surviving a female relative specified i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner of Wealth-tax v. Kantilal Manilal. In that case the facts were that one K, his wife P, their unmarried daughter, R, their son, D, and D's wife, U, were all members of a Mitakshara Hindu undivided family owning several properties. The son, D, had some separate properties of his own. D died on August 15, 1958. U filed a suit for obtaining her share in the properties left by D including his interest in the coparcenary property under section 6 of the Hindu Succession Act. This suit was settled and an amount of Rs. 10,70,000 was paid to U in full settlement of her claim. In the wealth-tax assessment of the Hindu undivided family for the assessment years 1960-61, 1961-62 and 1962-63, the Appellate Tribunal held that on the death of D, his one-third share in the joint family properties devolved on U and P, that is, D's mother, and thus ceased to belong to the assessee-family and the assessee was thereafter entitled only to the remaining two-thirds share in the coparcenary joint family properties. The matter having been brought to the High Court, the High Court held that the Tribunal was right in taking the view that only two-thirds share in the jewellery belonging to the joint family ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cceeded would have had if a partition had taken place immediately before his death and the remaining share belongs to the Hindu undivided family. Now, once this position is reached, it is clear that the Hindu undivided family and the heirs hold these properties as tenants-in-common. Where there are two or more co-owners of property, the co-ownership may assume one of several forms: it may be coparcenary or joint tenancy or tenancy-in-common. These are the main three forms of co-ownership which are commonly in use in legal relationship in this country. Here coparcenary is out of question because the heirs in their capacity as such would indubitably not be coparceners with the other members of the Hindu undivided family. The only question, therefore, can be whether the Hindu undivided family and the heirs hold as joint tenants or as tenants-in-common. Now the two main features of a joint tenancy are the right of survivorship and the four unities, namely, unities of possession, interest, title and time. Both these features are absent in the case we are considering. There is neither right of survivorship nor unity of interest. The interest of neither the Hindu undivided family nor the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... does not effect any actual partition between the different members of the coparcenary. On behalf of the assessee Mr. Patel relied on the decision of the Supreme Court in Munnalal v. Rajkumar . He contended that so far as a Hindu widow was concerned, under the Hindu Women's Rights to Property Act, 1937, which was in force between 1937 and 1956, a Hindu widow had a right to succeed to the interest of her husband in a coparcenary property and that right of hers gets enlarged from a life estate to a full estate by virtue of the provisions of section 14 of the Hindu Succession Act as interpreted by the Supreme Court in Munnalal v. Rajkumar. It must, however, be noted that under the Hindu Succession Act, by virtue of section 4, save as otherwise expressly provided in the Hindu Succession Act, any text, rule or interpretation of Hindu law or any custom or usage as part of that law in force immediately before the commencement of that Act shall cease to have effect with respect to any matter for which provision is made in the Act and any other law in force immediately before the commencement of the Act shall cease to apply to Hindus in so far as it is inconsistent with any of the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kalavati and Bhadrakumar. The result, therefore, was that Kalavati and Bhadrakumar each in their individual capacity became entitled to one-sixth share in the joint family business of Bipinchandra Gautamkumar. It is equally clear that the larger Hindu undivided family consisting of Shantikumar, Gautamkumar, Bhadrakumar and Kalavati continued to exist and continued to hold properties other than the joint family business of Bipinchandra Gautamkumar after November 10, 1956, on which date Gautamkumar had released his share in the Hindu undivided family business. Therefore, there were two separate assessable entities with effect from November 10, 1956. There was one assessable entity, namely, the joint Hindu undivided family of Shantikumar, Kalavati and Bhadrakumar, carrying on the business in the name of Bipinchandra Gautamkumar. Another assessable entity was the joint Hindu family called Shantikumar Jagabhai Hindu undivided family which owned all properties as prior to November 10, 1956, except the joint family business of Bipinchandra Gautamkumar. These two separate entities must be borne in mind in order to appreciate the correct legal position. Mr. Kaji, on behalf of the revenue, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Gautamkumar, each of these two persons, Kalavati and Bhadrakumar, was entitled to one-sixth share in his or her own individual separate right and not as a member of the Hindu undivided family and they must be assessed as such in their separate individual capacity regarding this one-sixth share of the income from that business. The question then arises as to whether Kalavati could effect a partition between herself and her minor son, Bhadrakumar, as has been recited in the so-called release deed of September 11, 1961. It may be reiterated here that till Shantikumar's death the business of Bipinchandra Gautamkumar, a joint family business, was being run by the Hindu undivided family consisting of Shantikumar, Bhadrakumar and Kalavati and in this joint family, the two coparceners were Shantikumar and Bhadrakumar. After the death of Shantikumar on September 1, 1961, the sole surviving coparcener in this family which was running the business of Bipinchandra Gautamkumar was Bhadrakumar, and Kalavati was entitled to get a share in the assets of this Hindu undivided family if and when a partition by metes and bounds took place between the coparceners of that family. If any partition b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the joint family properties. That is the effect of the decision of the Full Bench in Commissioner of Gift-tax v. Mrs. Taramati Hariprasad Vasa. We may point out that the Full Bench in that case held that, the decisions of the Bombay High Court in Raoji Bhikhaji v. Anant Laxman and of the Calcutta High Court in Sheo Dyal v. Judoonath had been approved by the Privy Council in Pratapmull v. Dhanbati Bibi. It was contended by Mr. Patel on behalf of the assessee that the decision of the Privy Council in Pratapmull v. Dhanbati Bibi was declared to be no longer good law by the Supreme Court in Munnalal v. Rajkumar. However, it must be observed, that the Supreme Court made that observation regarding the decision in Pratapmull v. Dhanbati Bibi, being no longer good law, in the context of the rights of a Hindu widow to get certain rights under the Hindu Women's Rights to Property Act as the widow's rights were enlarged by the provisions of section 14(1) of the Hindu Succession Act, 1956. It was in that particular context that the Supreme Court observed that the decision in Pratapmull v. Dhanbati Bibi is no longer good law. The provisions of section 4 of the Hindu Succession Act make it c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndu females have no right under Sastric Hindu Law to demand a partition by metes and bounds. The position becomes all the more glaring when we find that on September 11, 1961, there were only two members in this Hindu undivided family each owning the business of Bipinchandra Gautamkumar, namely, Kalavati in her own right and Bhadrakumar and, therefore, in view of this legal position, Kalavati had no right to demand the partition. Since there was no other coparcener in this Hindu undivided family, there was no question of a partition by metes and bounds being effected and least of all could Kalavati get a share on such a partition. Therefore, this partition as has been set out in the fourth sub-paragraph of paragraph 1 of the document dated September 11, 1961, was not effective in law and was contrary to the provisions of law. Therefore, no partition as regards two-thirds interest in the firm of Bipinchandra Gautamkumar can be said to have been effected between Kalavati and Bhadrakumar by virtue of the recitals set out in the document of September 11, 1961. Therefore, after September 11, 1961, all that happened was that the Hindu undivided family consisting of Kalavati and Bhadrakum ..... X X X X Extracts X X X X X X X X Extracts X X X X
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