COMMISSIONER OF WEALTH TAX ANDHRA PRADESH Vs. T YASODAMMA

JUDGEMENT

(1.) The question referred for our opinion under s. 27(1) of the W.T. Act, 1957, is :

(2.) The assessee, Smt. T. Yasodamma, is the daughter-in-law of one T. Chinna Venkata Subbaiah. Her husband predeceased Chinna Venkata Subbaiah. On 2/11/1970, a partition took place between Chinna Ventaka Subbaiah and the assessee. The assessee has an unmarried daughter. In the assessment proceedings under the W.T. Act, the assessee claimed that she together with her daughter constituted a Hindu undivided family and must be assessed as such. The relevant assessment years are 1971-72, 1972-73 and 1973-74. The WTO negatived her contention and assessed her as an individual. During the relevant years, exemption limit for an HUF was higher than that for the individual; that is why the controversy. On appeal, the AAC agreed with the WTO that the assessee cannot be said to constitute a Hindu undivided family merely because she had a daughter. On further appeal, the Tribunal, purporting to follow the decision of the Supreme Court in Smt. Sitabai v. Ramchandra, AIR 1970 SC 343, held that the assessee, together with her daughter, can be said to constitute an HUF and must be assessed as such. Thereupon, the Revenue asked for the obtained this reference. A fact which requires to be stated for the sake of clarity is that the assessees husband died prior to the coming into force of the Hindu Succession Act. This fact was stated by the counsel for the assessee before us, after due verification.

(3.) Once the partition took place Chinna Ventaka Subbaiah and the assessee, she became the absolute owner of the property which fell to her share, by virtue of s. 14 of the Hindu Succession Act. According to s. 14, any property acquired by a female by way of a partition becomes her absolute property. It is true that according to s. 8 of the Hindu Adoptions and Maintenance Act, the assessee is competent to adopt a boy but such an adoption does nor result in divesting her of the property which has already vested in her. Proviso (c) to s. 12 of the said Act expressly declares that though an adopted child shall be deemed to be the child of his or her adoptive father or mother for all purposes with effect from the date of the adoption, the adopted child shall not divest any person of any estate which vested in him or her before adoption. It may be noted that there is a distinction between an adoption made by a male Hindu holding ancestral properties and a female Hindu. If a male Hindu holding ancestral properties makes an adoption, the adopted boy gets an equal right with his father in the ancestral properties the moment he is adopted. But where a female Hindu makes an adoption after the coming into force of the Hindu Succession Act, the adoption does not result in divesting her of the property which is already vested in her and the adopted son does not get any right in that property by virtue of the adoption. Once this basic position is kept in mind, it would be clear that the capacity of or the possibility of - the assessee to adopt a boy, does not make any difference to the position obtaining in the relevant assessment years, viz., that she is the absolute owner of the properties and should be assessed only as an individual. Indeed, we find that there is a direct decision of the Orissa High Court on this point in Rukmini Bai Rathor v. CWT [1964] 54 ITR 430. After considering the several decisions of the Privy Council and the Indian High Courts and also the provisions of the Hindu Succession Act, the learned judges observed as follows (p. 439) : "The Hindu Succession Act has introduced far-reaching changes in the structure of the Hindu law of inheritance and succession, and a Hindu widow by virtue of section 14 of that Act, may become a fresh stock of descent, but as she has become full owner of her husbands properties, her children, if any, by her first husband, her adopted son if she cares to adopt, and her children if she gets married again, will all be her heirs and in that sense she and her children may form one joint family but none of them can have any right, by birth, in her property; and hence the Hindu joint family as ordinarily understood in Hindu law cannot be brought into existences. It is well known that there can be no Hindu joint family (except amongest Nairs in Malabar) cosisting of persons descended from a female ancestress. If Parliament intended that this new type of Hindu joint family should also be recognised as a Hindu undivided family when it passed the Wealth-tax Act in 1957, it would surely have made its intention clear by giving separate definition in the appropriate section of that Act. "That was also a case where a Hindu widow successed to the properties which her deceased husband had obtained on partition and had become the absolute owner of such properties under s. 14 of the Hindu Succession Act. She was having a minor unmarried daughter entitled to maintenance from the assessee. Her contention was that she along with her minor unmarried daughter constituted HUF for the purposes of the W.T. Act, 1957. On the reasoning mentioned above, the plea was negatived.