Decided on September 16,1966


Referred Judgements :-


Cited Judgements :-



- (1.)THIS is a reference under section 66(1) of the Indian Income-tax Act, 1922, which will be hereinafter referred to as the Act.
(2.)THE question of law referred for the opinion of this court is : "Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that registration should be granted to the firm."
The facts material for the purpose of this case may be stated thus : One Seshmull was the son of Roopchand; they were the only two members of their family; the father and the son got divided some time prior to November 15, 1936; on November 16, 1936, they entered into a partnership to carry on the very business that their family was carrying on earlier; Seshmull died on September 15, 1955, leaving behind him his widow Anoop Kunwar; he had no children; Roopchand died on November 29, 1955, leaving behind him his widow, Gattu Bai; after the death of Roopchand, Gattu Bai and Anoop Kunwar entered into a partnership; that firm was registered under section 26A of the Act; on October 17, 1956, Anoop Kunwar adopted Jugraj as a son to her deceased husband; the Hindu Succession Act came into force on June 17, 1956; Gattu Bai died on August 9, 1959; on September 5, 1959, a partnership was entered into between Jugraj and his adoptive mother, Anoop Kunwar; that partnership applied for registration under section 26A of the Act; that application was rejected by the Income-tax Officer and the order of the Income-tax officer was affirmed by the Appellate Assistant Commissioner holding that Anoop Kunwar had no separate interest in the assets of the partnership; the Income-tax Appellate Tribunal reversed the order of the Appellate assistant Commissioner and directed that the firm be registered. This reference was made at the instance of the Commissioner.

The parties before us are governed by Hindu Mitakshara law. The adoption of Jugraj to Seshmull which took place on October 17, 1956, in law dates back to the date of death of Seshmull on September 15, 1955. Therefore, it must be deemed that Jugraj was in existence as the son of Seshmull at the time of death of the latter. This question is more in controversy. There is no need to refer to any authority on this point. If any authority is needed, reference may be usefully made to the decision of the Supreme Court, in Krishnamurthy v. Druvaraj.

(3.)IT is not disputed before us that the estate taken by Gattu Bai on the death of her husband Roopchand on November 29, 1955, became her absolute estate on the coming into force of the Hindu Succession Act on June 17, 1956. After that date Gattu Bai was the absolute owner of that estate in view of section 14(1) of the Hindu Succession Act. IT is also not disputed before us that Gattu Bai's estate devolved solely on Jugraj on her death on August 9, 1959. After August 9, 1959, Jugraj was the owner of not only the estate of Gattu Bai, but also that of his adoptive father, Seshmull, subject to the rights obtained by Anoop Kunwar under section 3(2) of the Hindu Women's Right to Property Act (Act 18 of 1937). As Seshmull had died prior to the coming into force of the Hindu Succession Act, his widow, Anoop Kunwar, did not become his heir under the provisions of the Hindu Succession Act. But in view of section 3(2) of Act 18 of 1937, on the death of Seshmull his share in the joint family property had devolved on her, though, as the law stood then, she would have had only a life interest therein. The estate that had devolved on her is a statutory one. She had obtained a vested right in the same. The contention of Mr. Srinivasan, the learned counsel for the assessee, is that that estate inherited by Anoop Kunwar became her absolute estate after the coming into force of the Hindu Succession Act, in view of section 14(1) of that Act. On the other hand, it is contented by the learned counsel for the department that, though Anoop Kunwar had obtained a right to claim the share of her husband in the family properties, she having not claimed the same, consequently, she having not been divided in status from her adopted son, she could lay no claim for a separate share in the family property and, hence, the family can be represented only by Jugraj, its karta. We have now to consider which one of these contentions is correct.
The essential question for decision in this case is, whether the properties with which we are concerned in this are solely of the ownership of Jugraj or whether Anoop Kunwar has an independent share of her own in the same. If she has a separate interest in those properties and not merely an interest as a member of a Hindu undivided family, then the partnership entered into between her and her adopted son is valid.

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