Case: N. V. Narendranath Vs. Commissioner Of Wealth Tax, Andhra Pradesh,Hyderabad

or before a son is adopted, for the share which is taken at a partition by one of the coparceners is taken by him as representing his branch. Again the ownership of the dividing coparcener is such that female members of the family may have a right to maintenance out of it and in some circumstances to a charge for maintenance upon it. [See Arunachalams case, 1957 AC 540 (Supra)]. It is evident that these are the incidents which arise because the properties have been and have not been ceased to be joint family properties. It is no doubt true that there was a partition between the assessee, his wife and minor daughters on the one hand and his father and brothers on the other hand. But the effect of partition did not affect the character of these properties which did not cease to be joint family properties in the hands of the appellant.Our conclusion is that when a coparcener having a wife and two minor daughters and no son receives his share of the joint family properties on partition, such property in the hands of the coparcener belongs to the Hindu Undivided Family of himself, his wife and minor daughters and cannot be assessed at his individual property.It is clear that the present case falls within the ratio of the decision of this Court in Gowali Buddannas case, 1966-60 ITR 293 = (AIR 1966 SC 1523 ) (supra) and the Appellate Tribunal was right in holding that the status of the respondent was that of a Hindu Undivided Family and not that of an individual. 10. On behalf of the respondent reference was made to the decision of this Court in T. S. Srinivasan v. Commissioner of Income Tax, 1966-60 ITR 36 = (AIR 1966 SC 984 ), and it was contended that the decision proceeded on the basis that property received by the coparcener on partition cannot be regarded as property of a Hindu Undivided Family if he has merely a wife or daughter and no son. It is therefore necessary to examine the material facts and find out what is the ratio decidendi of that case. The appellant was a member of the Hindu Undivided Family with his father and brothers. As a result of partial partition of properties belonging to the Hindu Undivided Family the appellant received certain shares and with these shares as nucleus he acquired house properties, shares and deposits. His first son was born on 11th December, 1952 and it was common ground that the conception of the child must have taken place sometime in March, 1952. For the assessment year 1953-54 the relevant accounting year being the financial year 1st April, 1952 to 31st March, 1953 the appellant claimed that the income from the assets should be assessed in the hands of the Hindu Undivided Family consisting of himself and his son which, according to him, had come into existence in or about March, 1952 when the son was conceived. The Income Tax Officer recognised the Hindu Undivided Family only from the date of the birth of the son, viz., 11th December, 1952 and assessed the income till 11th December, 1952 in the hands of the appellant as an individual. The Appellate Assistant Commissioner and the Tribunal upheld this view on appeal. Before the High Court the question debated was whether the Hindu Undivided Family came into existence in or about March, 1952 when the son was conceived and whether the assessee could be assessed in the status of an individual for any part of the relevant accounting year. The question was answered against the assessee by the High Court. The assessee appealed to this Court and the contention of the appellant was that according to the doctrine of Hindu law a son conceived is in the same position as a son actually in existence. The argument was rejected by this Court which held that the Hindu Undivided Family did not come into existence on the conception of the son as claimed by the appellant, but came into being when the son was actually born. It was suggested on behalf of the respondent that the decision of this case must be taken to be implicitly, if not explicitly that there was no Hindu Undivided Family prior to the date of the birth of the son. But we do not think that any such implication can be raised. The case of the appellant throughout the course of the proceedings was that the Hindu Undivided Family came into existence for the first time in or about March, 1952 when the son was conceived and it was not his case at any time that a Hindu Undivided Family was in existence prior to the conception of the son. Indeed, it was common ground between the parties that there was no Hindu Undivided Family in existence prior to the conception of the son. The only dispute was whether the Hindu Undivided Family came into existence for the first time when the son was conceived as claimed by the assessee or whether it came into existence when the son was born as claimed by the Income Tax Department. The appellant relied on the doctrine of Hindu law that the son conceived is in the same position as the son born and the respondent contended that this doctrine was inapplicable. That was the only question raised before this Court which it was called upon to decide and which in fact it decided. The question whether there was in any event even without a son conceived or born, a Hindu Undivided Family consisting of the appellant and his wife and whether the properties received on partition belonged to that Hindu Undivided Family was neither raised nor argued before this Court which had no occasion to consider it. The decision of T. S. Srinivasans case, 1966-60 ITR 36 = (AIR 1966 SC 984 ) (supra) has therefore no bearing on the question now presented for determination in the present case.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]4. Under Section 3 of the Wealth Tax Act not a Hindu coparcenery but a Hindu Undivided Family is one of the assessable legal entities. A Hindu joint family consists of all persons lineally descended from a common ancestor, and includes their wives and unmarried daughters. A Hindu coparcenery is a much narrower body than the Hindu joint family;it includes only those persons who acquire by birth an interest in the joint or coparcenery property, these being the sons, grandsons and great-grandsons of the holder of the joint property for the time beingThe first question involved in this case is whether the status of the appellant was that of a Hindu Undivided family consisting of himself, his wife and his daughtersIn this connection, a distinction must be drawn between two classes of cases where an assessee is sought to be assessed in respect of ancestral property held by him; (1) where property not originally joint is received by the assessee and the question has to be asked whether it has acquired the character of a joint family property in the hands of the assessee, and (2) where the property already impressed with the character of joint family property comes into the hands of the assessee as a single coparcener and the question required to be considered is whether it has retained the character of joint family property in the hands of the assessee or is converted into absolute property of the assessee6. Different considerations would be applicable, where property already impressed with the character of joint family property comes into the hands of a single coparcener. The question to be asked in such a case in whether the property retains the character of joint family property or whether it sheds the character of joint family property and becomes the absolute property of the single coparcener. In Commissioner of Income Tax v. Gomdalli Lakshminarayan, 1935-3 ITR 367   = (AIR 1935 Bom 412  ), the property was ancestral in the hands of the father and the son had acquired an interest in it by birth. There was a subsisting Hindu Undivided Family during the life-time of the father and that family did not come to an end on his death. On these facts, the Bombay High Court held that the income received from the property was liable to super-tax as the income of the Hindu Undivided Family in the hands of the son who was the sole surviving male member of the Hindu Undivided Family in the year of assessment. The reasoning was that the property from which income accrued originally belonged to a Hindu Undivided Family and on the death of the father it did not cease to be property of that Hindu Undivided Family but continued to belong to that Hindu Undivided Family and its income in the hands of the son was, therefore, assessable as income of the Hindu Undivided Family. There was a vital distinction between the facts of this case and the facts in Kalyanjis case, 1937-5 ITR 90 = (AIR 1937 PC 36  ) (supra). This distinction was not noticed by the Judicial Committee in Kalyanjis case, 1937-5 ITR 90 = (AIR 1937 PC 36  ) (supra) when it observed that the Bombay High Court arrived too readily at the conclusion that the income was the income of the family. When Gomadallis case, 1935-3 ITR 367   = (AIR 1935 Bom 412  ) (supra) was carried on appeal the Judicial Committee once again failed to notice the distinction and wrongly reversed the decision of the Bombay High Court holding that the facts of the case were not materially different from the facts in Kalyanjis case, 1937-5 ITR 90 = (AIR 1937 PC 36  ) (supra) [See the decision of the Judicial Committee in Commissioner of Income Tax, Bombay v. A. P. Swamy Gomedalli, 1937-5 ITR 416 = (AIR 1937 PC 239)]6. Different considerations would be applicable, where property already impressed with the character of joint family property comes into the hands of a single coparcener. The question to be asked in such a case in whether the property retains the character of joint family property or whether it sheds the character of joint family property and becomes the absolute property of the single coparcener. In Commissioner of Income Tax v. Gomdalli Lakshminarayan, 1935-3 ITR 367   = (AIR 1935 Bom 412  ), the property was ancestral in the hands of the father and the son had acquired an interest in it by birth. There was a subsisting Hindu Undivided Family during the life-time of the father and that family did not come to an end on his death. On these facts, the Bombay High Court held that the income received from the property was liable to super-tax as the income of the Hindu Undivided Family in the hands of the son who was the sole surviving male member of the Hindu Undivided Family in the year of assessment. The reasoning was that the property from which income accrued originally belonged to a Hindu Undivided Family and on the death of the father it did not cease to be property of that Hindu Undivided Family but continued to belong to that Hindu Undivided Family and its income in the hands of the son was, therefore, assessable as income of the Hindu Undivided Family. There was a vital distinction between the facts of this case and the facts in Kalyanjis case, 1937-5 ITR 90 = (AIR 1937 PC 36  ) (supra). This distinction was not noticed by the Judicial Committee in Kalyanjis case, 1937-5 ITR 90 = (AIR 1937 PC 36  ) (supra) when it observed that the Bombay High Court arrived too readily at the conclusion that the income was the income of the family. When Gomadallis case, 1935-3 ITR 367   = (AIR 1935 Bom 412  ) (supra) was carried on appeal the Judicial Committee once again failed to notice the distinction and wrongly reversed the decision of the Bombay High Court holding that the facts of the case were not materially different from the facts in Kalyanjis case, 1937-5 ITR 90 = (AIR 1937 PC 36  ) (supra) [See the decision of the Judicial Committee in Commissioner of Income Tax, Bombay v. A. P. Swamy Gomedalli, 1937-5 ITR 416 = (AIR 1937 PC