Calcutta H.C : Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the share of income from property at Nohar in Rajasthan, the share income from Thirani Building, Darjeeling, and the share of income from the firm of M/s Maheshwari & Co. could be included in the assessment of the assessee in the status of a HUF ?

Counsel Appeared

A.C. Moitra with R.C. Prasad, for the Revenue : Dilip Dhar, for the Assessee

DIPAK KUMAR SEN, J.:

In this application under s. 261 of the IT Act., 1961, the CIT, West Bengal-XIII, seeks a certificate from us that IT Ref. No. 173 of 1978 (intituled Ram Gopal Thirani & Sons vs. CIT), where a judgment was delivered by this Court on 7th Nov., 1984, is a case fit for appeal to the Supreme Court.

The substantial question which, it is contended, arises in this case is whether, having regard to the provisions of the Hindu Succession Act, 1956 and the fact that the assessee being governed by the Mitakshara School of Hindu Law, his status would be that of an individual and not that of an HUF relating to the properties and business inherited by him.

The relevant facts may be shortly noted. In the asst. yrs. 1969-70 and 1971-72, Ram Gopal Thirani, the assessee claimed, that the properties which he had inherited from his father Ishwardas Thirani, deceased, were his personal properties and not joint properties of the HUF of which he was the Karta and the income thereof could not be assessed as income of the HUF. The ITO rejected the claim of the assessee.

4. On an appeal, the AAC also rejected the contentions of the assessee and confirmed the order of the ITO. On further appeal before the Tribunal the Tribunal upheld the order of the AAC following its earlier order.

5. On an application under s. 256(1) of the IT Act., 1961, the following question was referred as a question of law arising out of the order of the Tribunal for the opinion of this Court : “Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the share of income from property at Nohar in Rajasthan, the share income from Thirani Building, Darjeeling, and the share of income from the firm of M/s Maheshwari & Co. could be included in the assessment of the assessee in the status of a HUF ?”

6. By its judgment dt. 7th Nov., 1984, this Court in IT ref. No. 173 of 1978 answered the question in the negative and in favour of the assessee. This Court relied on a decision in the case of the brother of the assessee, where on identical facts, the controversy was resolved in favour of the assessee. This case is Malchand Thirani & Sons vs. CIT (1980) 121 ITR 976 (Cal) : TC37R.279.

In the case of the Malchand Thirani & Sons vs. CIT (supra) an identical question was referred to this Court. This Court found that Iswardas, his three sons including the assessee and two unmarried daughters were the members of a HUF. It was further found that this family at the material time stood divided and all properties were duly partitioned by a registered deed dt. 23rd Feb., 1959. Under the deed of partition, Ishwardas received properties which are in issue in this case and in respect thereof was assessed as an individual in respect of the income of these properties. On the death of Ishwardas in 1963, the widow and the daughters relinquished their interest in the properties which had been allotted to Ishwardas on partition. On these facts, it was held by this Court that on the death of Ishwardas, his individual properties had been inherited by the widow, the sons and the daughters in equal shares as tenants-in-common and not as joint tenants. The sons had no interest whatsoever in the properties during the lifetime of Ishwardas and no part of the income from these properties could be included in the assessment of the sons in their status as HUF.

7. The decisions of different Courts were cited before us and it appears that the Allahabad High Court in the case of CIT vs. Ram Rakshpal, Ashok Kumar (1968) 67 ITR 164 (All) : TC37R.281 has differed from the decision on the Gujarat High Court in the case of CIT vs. Dr. Babubhai Mansukhbhai 1975 CTR (Guj) 104 : (1977) 108 ITR 417 (Guj). The Full Bench of the Madras High Court in the case of Addl. CIT vs. P. L. Karuppan Chettiar 1978 CTR (Mad) 311 (FB) : (1978) 114 ITR 523 (Mad) : TC37R.282 has followed the decision of the Allahabad High Court in the case of CIT vs. Ram Rakshpal (supra) and has differed from the case of CIT vs. Dr. Babubhai Mansukhbhai (supra).

8. In CIT vs. Dr. Babubhai Mansukhbhai (supra) the facts were that a son inherited self-acquired properties of his father. The son was the Karta of a joint HUF of himself and his son. On these facts, it was held that as the property received by the son was ancestral, the son must hold the self-acquired property of his father in coparcenary with his own son even if the latter was born after the son inherited the property. This view is in consonance with the commentaries contained in Mulla’s Hindu Law, 14th Edn.

9. It appears that s. 6 of the Hindu Succession Act, 1956, was construed by the Madras High Court in Arunachalathammal vs. Ramachandran Pillai AIR 1963 Mad 255. This decision of the Madras High Court was affirmed by the Supreme Court by its judgment dt. 20th Feb., 1970, in Civil Appeal No. 115 of 1967. The Supreme Court observed that s. 6 of the Hindu Succession Act had no application to the properties received by the members of the joint family by partition. This judgment of the Supreme Court has been referred to in Tirupurasundari Ammal vs. Srinivasan Pillai AIR 1972 Mad 264 and is reported as Ramachandra Pillai vs. Arunachalathammal in (1971) 3 SCC 847. It appears that the controversy, if any, in the matter has been set at rest by the Supreme Court by the aforesaid observation.

In that view of the matter, this application cannot succeed.

There will be no order on this application. There will be no order as to costs.

MONJULA BOSE, J.:

I agree.

[Citation : 171 ITR 314]