INCOME TAX OFFICER Vs. JAGRANI BAI
LAWS(IT)-1989-12-5
INCOME TAX APPELLATE TRIBUNAL
Decided on December 29,1989

Appellant
VERSUS
Respondents

JUDGEMENT

M.K. Chaturvedi, Judicial Member - (1.)THESE four appeals filed by the revenue are directed against the order of Appellate Assistant- Commissioner. The Income-tax appeal relates to the assessment year 1981-82 and the .Wealth-tax appeals pertain to assessment years 1979-80,1980-81 and 1981-82'. Since the dispute in all these appeals rotates round the common issue for the sake of convenience, these are disposed of together.
(2.)Before we come-to the grip of the issue it would be beneficial to keep in focus the factual canvas of the case. The facts stated in the affidavit dated 28-3-1988 are as under:
I, Smt. Jagrani Bai, w/o T. Jairaj Singh, R/O. 5-5-102/1, Ramgunj, Secunderabad solemnly declare that my husband Sri T. Jairaj Singh, who was having extra-marital relationship with many other ladies, thereby causing lot of mental agony and tension to me and disrupting the entire family atmosphere in my house. I had already 3 daughters who were born out of our wedlock and I was very much worried about their future. In order to make their life secure, and also for the sake of their education, maintenance and marriage, I decided to settle major portion of my self-acquired property on all my 3 daughters who were minors at that time, through a registered family Settlement Deed and implemented the decision on 26-6-1978. As per the above Settlement Deed I settled the following portions in favour of my all the 3 daughters:

1. Kum. Sangeetha Rani - 3-6-150/3/A, 2nd floor Himayatnagar, Hyderabad (since married in Nov. 1981)

2. Kum. Sabitha Rani -3-6-150/2/A, 1st floor, Himayatnagar, Hyd. (since married in April, 1985)

Kum. Babitha Rani - 3-6-150/1/A, Ground Floor Himayatnagar, Hyderabad.

The misunderstandings between myself, and my husband grew more and more till it culminated in his second marriage, to another lady. During January, 1982, my husband married a lady by name Nirmala and since then he is living separately with his new wife. At present he is having 3 children who were born to Nirmala, the second wife.

This is true to the best of my knowledge and belief.

Sd/- (JAGRANIBAI) DEPONENT.

3. Our attention was invited at the deed of settlement dated 26-6-78. Clause 5 of the settlement deed put certain restriction apropos the right to dispose the property. The main issue before us in all these appeals is whether income from the property settled by the assessee in favour of her 3 minor children in the settlement deed dated 16-6-78 (registered on 15-7-78) is includible in the assessee's income under Section 64 of the Income-tax Act, 1961. Similarly whether the same is includible in the assessee's wealth also. The learned Departmental Representative invited our attention to the provisions of Section 64(1)(v) which prescribes as under:-

64. (1) In computing the total income of any individual, there shall be included all such income as arises directly or indirectly-

(v) Subject to the provisions of Clause (i) of Section 27, in a case not falling under Clause (iii) of this sub-section, to a minor child (not being a married daughter) of such individual, from assets transferred directly or indirectly to the minor child by such individual otherwise than for adequate consideration;

It was argued that since the word "transfer" appearing in Section 64( l)(v) comprises within its ambit both direct and indirect transfer, income arising from the properties alleged to have been transferred by a deed of settlement, is eligible to tax within the ken of Section 64(1 )(v). It was further Argued that the impugned transfer cannot be put within the umbra of family settlement. Learned Departmental Representative vehemently contended that the conditions precedent for making a family settlement were not fulfilled as the deed of settlement does not provide or suggest any dispute for which the family settlement was made. The husband is a witness to the settlement which shows that the dispute was fictitious. He also objected to the action of Appellate Asst. Commissioner in admitting affidavit after such a long time without adducing any reason for accepting the same. According to learned Departmental Representative the transfer is a simple/gift and it cannot be considered as a family settlement.

(3.)SRI B. Narasimha Rao, learned counsel for the assessee stated before us that the family of the assessee comprised of herself, her husband and 3 minor daughters. Since the assessee was not maintaining amicable relation with her husband and she was worried about the future of her minor children, she resorted to family settlement. The dispute between husband and wife could only be explained with reference to the concerned party's statement and conduct. In the affidavit the assessee being a Hindu lady, in clear and unequivocal terms had given the state of affairs which gave rise to family disputes. The mere fact that affidavit was sworn after the efflux of considerable long period, is not curcumstance, aliened to which the explanation offered by the assessee could be rejected. Learned counsel stated that even under Adoption and Maintenance Act it is the legal responsibility of the mother to take care of her children. Our attention was invited by the learned counsel to page 1123 of Mulla's Hindu Law: 15th Edition. Commenting on the implication of Section 20 of the Hindu Adoption and Maintenance Act, the learned author stated as under :-
...But the law laid down in the Section goes further than that and rules that not merely as male Hindu as was the law previously applicable but a female Hindu as well is now under a legal obligation to maintain legitimate or illegitimate children and aged or infirm parents.



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