ORDER
R. Jayasimha Babu, J.
The’assessee along with his two elder brothers constituted an HUF till 15-9-1952, when there was a partition among the brothers. At that point of time the assessee was a bachelor and remained so till 7-1960. During that period the assessee was assessed as an individual for the purpose of wealth-tax The assessee got married on 7-6-1960. A daughter was born to them on 9-2-1963, and the assessee celebrated the marriage of his daughter on 9-2-1981.
2. The assessment year with which we are concerned is 1982-83. The assessee filed a WT return disclosing the wealth of the assessee in the capacity of a specified HUF. The return filed for the year 1982-83 was the very first return filed by the assessee under the Wealth Tax Act and that return was filed under the amnesty scheme. The claim made by him in a revised return subsequently filed that he should be assessed as an individual for the assessment year 1982-83 was rejected by the Income Tax Officer. The assessee was assessed as a specified HUR In appeal, the Dy. Commissioner (Appeals) accepted the assessee’s claim that he should be treated as an individual. However, on further appeal to the Tribunal, the order of the Income Tax Officer was restored. The assessee is now before us seeking answers to the two questions which have been referred to us at his instance questioning the correctness of the order of the Tribunal. The questions are, as to whether the Tribunal was right in holding that the property obtained by the assessee at the partition should be held to be that of the joint family after his marriage on 7-6-1960 and as to whether the Tribunal was right in holding that the status of the assessee for the assessment year 1982-83 was HUF and not individual.
3. As noticed earlier, the assessee had not been assessed to wealth-tax at any point of time prior to the assessment year 1982-83. In that year, the assessee was admittedly having a family which consisted of himself, his wife and a married daughter. The property held by him at that point of time was the property which had been allotted to his share at a partition in the year 1952, that partition being one at which the ancestral properties had been divided among the assessee and his brothers, there could be no doubt that the property which was held by the assessee during the previous year relevant to the assessment year 1982-83 was joint family property and.not individual property.
4. Learned counsel for the assessee, however, contended that the property is not that of the HUF as even though the family of the assessee can be termed as an HUF, the property belonged only to the assessee as an individual and not to the HUR In the submission of counsel property held by a member of an HUF can be regarded as property of such a family only if there is a plurality of persons within the family who can claim a share in the property. As neither the daughter nor the wife could claim a share in the property, the property though ancestral to the assessee could not be regarded as property belonging to the HUR
5. Learned counsel for the assessee further submitted that as the assessee was a bachelor at the time of the petition in the year 1952, the property which came to vest in him after the partition was the property which he was free to deal with as he liked, and that property did not assume or resume the character of property of an HUF when the assessee subsequently acquired a family.
6. Learned counsel placed reliance on the decision of the Supreme Court in the case of Surjit Lal Chhabda v. CIT 1976 CTR (SC) 140.. (1975) 101 1TR 776 (SC) and submitted that the decision of the apex Court supports the assessee’s claim that the property can be regarded as belonging to an HUF only when within the family there exists more than one member capable of claiming a share. In the absence of such a sharer the property would be the individual property of the person in whom it vests even if he be a Hindu and has a family which is undivided.
7. In the case of Sujit Lal Chliabda (supra), the Supreme Court after reviewing the earlier decisions observed thus :
“The joint Hindu family, with all its incidents, is thus a creature of law and cannot be created by act of parties, except to the extent to which a stranger may be affiliated to the family by adoption. But the absence of an antecedent history of jointness between the appellant and his ancestors is no impediment to the appellant, his wife and unmarried daughter forming a joint Hindu family. The appellant’s wife became his sapinda on her marriage with him. The daughter too, on her birth, became a sapinda and until she leaves the family by marriage, the tie of sapindaship will bind her to the family of her birth. As said by Golapchandra Sarkar Sastri in his Mndu Law (8th Edn., p. 240), ‘those that are called by nature to live together, continue to do so’ and form a joint Hindu family. The appellant is not by contract seeking to introduce in his family strangers not bound to the family by the tie of sapindaship. The wife and unmarried daughter are members of his family. He is not by agreement making them so. And as a Hindu male, he himself can be the stock of a fresh decent so as to be able to constitute ‘ an undivided family with his wife and daughter.”
8. With regard to the facts of that case, the Court observed as under :
“Kathoke Lodge was not an asset of a pre-existing joint family of which the appellant was a member. It became an item of joint family property for the first time when the appellant threw what was his separate property into the family hotchpot. The appellant has no son. His wife and unmarried daughter were entitled to be maintained by him from out of the income of Kathoke Lodge while it was his separate property. Their rights in that property are not enlarged for the reason that the property was thrown into the family hotchpot. Not being coparceners of the appellant, they have neither a right by birth in the property nor the right to demand its partition nor indeed the right to restrain the appellant for alienating the property for any purpose whatsoever. Their prior right to be maintained out of the income of Kathoke Lodge remains what it was even after the property was thrown into the family hotchpot : the right of maintenance, neither more nor less. Thus, Kathoke Lodge may be usefully described as the property of the family after it was thrown into the common stock, but it does not follow that in the eye of Hindu law it belongs to the family, as it would have, if the property were to devolve on the appellant as a sole surviving coparcener. ”
9. The dist ‘ inction pointed out by the Supreme Court is very material for deciding as to whether the absence of a second sharer within the HUF renders what is otherwise joint family property individual property. In cases where the property held by the person who claims it to be his own, had in fact been held b~ a joint family earlier and is ipso facto capable of being held by other sharers as well in future if and when the family comes into existence and a son whether by birth or adoption is added thereto, such property continues to retain the character of joint family property even when the family is reduced to a single male member as in the case of a sole surviving coparcener. Though such a sole surviving coparcener may be assessable as an individual, as he cannot be said to have a family, unless there are in fact present female members in the family, the character of the property continues unaltered as joint family property, though for the time being if is not shared with any other member of the family and may or may not be subject to any charge in favour of anyone else for any purpose.
10. In cases where an HUF but does not have an ancestral property and the property is sought to be treated for the first time as belonging to the HUF, before it can be so treated as property belonging to a joint family, such a family should have at least two members capable of claiming a share in the property. If the property is held by the person who seeks to impress it for the first time with the character of joint family property notwithstanding any declaration that he may make, that property will continue to be the property which he can deal with as he likes subject only to the incidents which similar property in the hands of any others are subject.
11. In the case of Chhabda (supra) the Court held that though there e>dsted an HUF, the HUF is not the same as the coparcenary which is normally a smaller body, and the head of every HUF is not to be assessed as manager of an HUF unless the HUF has an income of its own or assets of its own. The assessee in that case who did not have a son but only had a wife and daughter had sought to impress his separate property with the character of joint family property. He could not on that score alone treat the income from that property as income from joint family property. The fact that the wife and the daughter had a right to claim maintenance from the property was not sufficient to regard that separate property subsequently impressed with the character of joint family property as property belonging to the HUF for the purpose of assessment under the Income Tax Act.
12. What was emphasised by the Court in the case of Chhabda (supra) was that two factors must coalesce (1) there must just a pluraility of persons constituting an HUF and (2) that the property which is to be treated as property belonging to the HUF must be property which has been held earlier by a coparcenary in which a member of that family was one of the coparceners.
13. In the case of N. V. Marendranaths v. CWT (1969) 74 1TR 190 (SC) .. the apex Court held that the ancestral property allotted to a member whose family consisting of himself, his wife and his daughter was the property belonging to the HUF and required to be assessed as such, notwithstanding the absence of a son who alone could claim partition. In that case, the two factors referred to earlier coalesced-there instead a family and property was ancestral. The Supreme Court disagreed with the High Court which had held that in the absence of a son who could claim a partition, the property though ancestral was only to be assessed as an individual property of the assessee therein.
14. In this case, the assessee had admittedly received his share of ancestral property at a partition. The property had the character of joint family property. That property was held for some time by the assessee by himself as he was a bachelor between 1952 and 1960. During that period the character of the property as joint family property was not erased though it was open to him to deal with the property as he liked in the period. When the assessee got married and acquired a family, that family constituted an HUF and the ancestral property which the assessee had received at the partition, became the property of that HUF.
15. In cases where the property even at the time it vested in the hands of the head of the family had the character of ancestral property, the absence of a son, who can claim partition does not render what is joint family property individual property. The test is not as to whether his issues are male or female. The test is whether the property was ancestral.
16. Learned counsel for the assessee submitted that at least two High Courts those at Patna and Madhya Pradesh have held that in cases where an individual receives his share of the ancestral property at a partition and is assessed as an individual, he should continue to be so assessed even after he acquires a family, until such time he begets a son who can claim a share in the property. Counsel referred to the decision of the Patna High Court in the case of CIT v. Shankar Lal Budhia (1987) 61 CTR (Pat)(PB) 298 : (1987) 165 ITR 380 (Pat)(FB) and that of the Madhya Pradesh High Court in the case of CIT v. Vishnukumar Bhaiya (1983) 35 CTR (MP) 38: (1983) 142 ITR 357 (MP) . With great respect to the learned Judges who decided those cases, we are unable to agree with that line of reasoning.
17. Learned counsel for the Revenue, on the other hand, referred to the decisions of the Allahabad, Karnataka and Andhra Pradesh High Courts in the case of Prem Kumar v. CIT (1980) 121 1TR 347 (All), Bharath Kumar D. Bhatia v. CIT (1992) 108 CTR (Kar) 351 : (1993) 199 M 190 (Kar) , Ashok Kumar Ratanchand v. CIT (1991) 93 CTR (AP) 202 : (1990) 186 1M 475 (AP) wherein it has been held that an individual who receives ancestral property at a partition and who subsequently acquires a family but has no male issues would hold that property only as property of the HUF.
18. For the reasons given by us in the earlier paragraphs, we answer the questions referred to us in favour of the Revenue and against the assessee.
OPEN