V.G.OAK, C.J. - (1.) THE Income-tax Appellate Tribunal, Hyderabad Bench, has referred the following question of law to this court : "Whether the assessee, who has no male issue, constitutes a Hindu undivided family with his wife and unmarried daughters in respect of the income from property which has fallen to his share on partition ?"
(2.) SHRI Beni Prasad is the assessee. The assessment year is 1958-59. The assessee is the son of SHRI Manmohan Das Tandon. At one time the joint family consisted of SHRI Manmohan Das Tandon and his five sons including the present assessee. There was a complete partition between the members of the joint family. For several years SHRI Beni Prasad was assessed in the status of an individual. He was so assessed for the assessment year 1958-59 also. The income so assessed included the income received from the property allotted to SHRI Beni Prasad upon partition. The assessee appealed. He raised the point that, although a sum of Rs. 26,476 was his personal income, the income derived from the property allotted upon partition was income of the Hindu undivided family consisting of himself, his wife and minor daughters. This contention was not accepted by the Appellate Assistant Commissioner. He dismissed the appeal, and confirmed the order of the Income-tax officer. Upon further appeal, the contention raised by the assessee was liable to pay tax on the amount of Rs. 26,476, the rest of the income should be excluded from the assessment of the appellant in his individual status. The appeal was allowed accordingly. The Commissioner of Income-tax, U.P., applied for a reference to the court raising the point that the Tribunal was wrong in holding that the income from property received upon partition was not the assessees separate income. The Tribunal has accordingly referred the question of law quoted above. Kalyanji Vithaldas v. Commissioner of Income-tax is a decision of the Privy Council. On page 94 of the judgment their Lordship observed : "There remain the case of Kanji and Sewdas.......Without deciding the question which was left open in....their Lordships, for the purposes of the present case, will assume that their interest was ancestral property, so that, if either had had a son, the son would have taken an interest therein by birth. But no son having been born, no such interest has arisen to qualify or diminish the interest given by Moolji to Kanji and to Sewdas. Does then there existence of a wife, or of a wife and a daughter, make it income of a Hindu u divided family rather than income of the individual partner ? Their Lordships think not. A mans wife and daughter are entitled to be maintained by him out of his separate property as well as out of property in which he has a coparcenary interest, but the mere existence of a wife or daughter does not make ancestral property joint." It was further observed on page 96 : ".....it would not be in consonance with ordinary or with a correct interpretation of the law of Mitakshara, to hold that property which a man has obtained from his father belongs to a Hindu undivided family by reason of having a wife and daughters." Attorney-General v. Arunachalam Chettiar is another decision by the Privy Council. In that case a Hindu undivided family consisted of the father, a son and several females. The son died in 1934. The father died in 1938. No other coparcener came into existence between on 1934 and 1938. The fathers widow and the sons widow had powers of adoption. These powers were in fact exercised after the fathers death. It was held that the father was at his death a member of a Hindu undivided family, the same undivided family of which his son, when alive, was a member and of which the continuity was preserved after the fathers death by the adoptions.
(3.) IN Krishnamurthi v. Dhruwaraj B died in 1882 predeceasing his father, N, and leaving behind his widow, T.N. died in 1892 leaving behind K, his daughter, who succeeded to his property as full owner. K died in 1933, and her son, V, who has succeeded to her property also died in 1934 leaving behind two sons, the appellants. T adopted D, the respondent in 1945. It was held that the respondent was entitled to succeed in the suit as his adoption had the effect of divesting the family of the property inherited from K. In Arunachala Mudaliar v. Muruganatha Mudaliar their Lordships of the Supreme Court observed at page 499 thus : "The property of the grand-father can normally vest in the father as ancestral property if and when the father inherits such property on the death of the grand-father or receives it, by partition, made by the grand-father himself during his lifetime. On both these occasions, the grand-fathers property comes to the father by virtue of the latters legal right as a son or descendant of the former and consequently it becomes ancestral property in his hands." ;