JUDGMENT
Syed Shah Mohammed Quadri, J.
1. In Referred Case No. 78 of 1986, which arises under the Income-tax Act, the following question of law is referred to this court for opinion :
“Whether, on the facts and in the circumstances of the case, the Tribunal erred in law in holding that the rental income from the house in question is assessable as income of the smaller Hindu undivided family consisting of the assessee and his wife ?”
2. In Referred Case No. 45 of 1987, which arises under the Wealth-tax Act, the following question of law is referred to this court for opinion :
“Whether, on the facts and in the circumstances of the case, the Tribunal erred in law in holding that the value of the house and the site in question is assessable entirely as the property of the smaller Hindu undivided family consisting of the assessee and his wife ?”
3. As the abovesaid questions of law arose out of the same facts relating to the property in question, both the cases were heard together and are being disposed of by this common judgment.
4. The assessee was the karta of a Hindu undivided family which consisted of himself and his four sons. The family effected a partition and a partition deed was executed on June 26, 1955. An application under section 25A of the Indian Income-tax Act, 1922, was filed for recognition of the partition. The same was allowed. Pursuant to the said partition, the assessee got moneylending capital and one house situated on the G. N. T. Road, Eluru. In the year 1971, the Wealth-tax Officer came to know that neither the rental income from the house nor the capital value of the house was disclosed by the assessee for income-tax and wealth-tax purposes from the years 1956-57 till 1970-71. Therefore, a show-cause notice was issued to the assessee in the year 1972. In his reply dated March 28, 1972, the assessee stated that the house was allotted to him on the understanding that it would be used for charitable purposes, but the same could not be used as such. Therefore, on the demand made by his sons, he settled the dispute and executed a declaration on April 14, 1961, throwing the said house into the common hotchpot of the family and thereafter the said house was being enjoyed by the assessee and his four sons as the Hindu undivided family. It is also contended that the said partition effected on June 26, 1955, was only a partial partition and that an extent of ac. 50-00 of land was also kept undivided as per the partition deed. He filed a copy of the order of the Assistant Settlement Officer, Eluru, dated May 12. 1959, granting patta in respect of ac. 15.90 cents out of the said extent of land situated at Gopannapalle village on the ground that the same was in the possession of the assessee’s father. The Wealth-tax Officer, not being satisfied with the explanation given by the assessee, passed orders assessing the capital value of the land as well as the house for the assessment year 1964-65 and also for subsequent years 1965-66 to 1971-72. Similarly, the Income-tax Officer also assessed the income from the said house for the years 1964-65 to 1972-73. On appeal, the Appellate Assistant Commissioner allowed the appeal. The Revenue carried the matter in appeal before the Appellate Tribunal. The Tribunal allowed the appeal of the Revenue and held that the income and the property were rightly brought to tax under the Income-tax Act as well as under the Wealth-tax Act.
5. Learned senior counsel, Sri A. Venkataramana, appearing for the assessee, contends that on April 14, 1961, a settlement was arrived at, by which, the property was again brought to the common hotchpot of the family and, therefore, it became joint family property and, as such, the assessee alone could not have been assessed to tax either in respect of the income from the property or in respect of its capital value. He alternatively contends that the property should be deemed to have been held jointly by the father and his four sons and, therefore, only one-fifth of the income and capital value could have been assessed in respect of the assessee.
6. Sri S. R. Ashok, learned standing counsel for the Revenue, on the other hand, contends that when partition was effected in April, 1955, the family got divided and, therefore, there was no joint family as such. to have a common hotchpot in which the property could be thrown by the assessee in the year 1961. In so far as the land is concerned, learned standing counsel submits that after the partition of the properties by the family, the land which remained undivided can only be said to be held by the erstwhile coparceners as joint property and the remaining property cannot be treated as joint family property.
7. From the narration of the above facts, it is clear that the erstwhile joint family of the assessee and his four sons made an oral partition and later the same was reduced to writing and was registered on June 26, 1955. In the said partition, the land to an extent of ac. 50.00 was kept joint on the ground that it was incapable of division. Later, the assessee held an extent of ac. 15.90 cents of land out of the said extent of ac. 50.00, for which patta was granted by the settlement officer in the year 1959. The fact of partition was brought to the notice of the Income-tax Officer under section 25A of the Indian Income-tax Act, 1922, by filing an application for recognition of the partition, which was accepted by the Income-tax Department. Consequently, there was disruption of the joint family. On the ground that some disputes arose between the assessee and his sons, a declaration was executed by the assessee purporting to throw the said house into the common hotchpot of the joint family on April 14, 1961. It is worth noticing that from the year 1955, till 1961, when the property was admittedly held by the assessee and he was enjoying the income thereof, he did not file any return of income nor did he include the same in his assets for the purpose of wealth-tax. It may also be pertinent to note that the plea taken by the assessee that the house was given for the purpose of charity cannot be accepted in view of the fact that in the year 1967, in reply to a notice issued by the Endowments Department, the assessee replied that it belongs to him exclusively. In view of the claim made by the assessee in the year 1967, both the pleas, namely, that the house was given for charitable purposes and the plea that the house was thrown into the common hotchpot of the family, are belied. From 1955, till 1961, he did not show the said house as his property or as belonging to the charity, but at the same time, he enjoyed the income from the said house. Further, from 1961, when it is alleged to have been thrown into the common hotchpot of the joint family, he did not include one-fifth of the income from the property nor the value of the property in his income nor did any one of his sons show their respective shares of income or the capital value of the property thereof in their wealth-tax returns. The plea that the property was thrown into the common hotchpot in 1961 was negatived by the Tribunal on the ground that there was no joint family in existence and the assessee was not a member of the joint family as on that date, and, therefore, the property could not have been brought to the common hotchpot of the joint family, which was not in existence at that time. In this connection, the Tribunal relied on the decision of the Supreme Court in Joint Family of Udayan Chinubhai v. CIT . In our view, the conclusion arrived at by the Tribunal that the family got disrupted when the order under section 25A was passed in pursuance of the registered partition deed dated June 26, 1955, and the Hindu undivided family consisting of the assessee and his four sons ceased to exist thereafter is right. We may also observe here that this finding of the Tribunal is not seriously questioned before us. What is strenuously contended before us is that the house was, at any rate, the common property being used by the assessee and his sons and the assessee was having only one-fifth share in the said property and, as such, the property could not have been held as belonging to the smaller Hindu undivided family consisting of the assessee and his wife. In view of what is stated above, the plea of the assessee that the smaller Hindu undivided family is only having one-fifth share in the said property cannot be accepted. The important document relating to the alleged settlement of the property dated April 14, 1961, was not placed before the Appellate Tribunal or even before this court. We may also mention here that the plea now put forward before us that the smaller Hindu undivided family consisting of the assessee and his wife had only one-fifth share was not urged either before the Income-tax Officer or before the Appellate Assistant Commissioner or before the Appellate Tribunal. The plea taken before the Appellate Tribunal that the property was thrown into the common hotchpot of the joint family, having been negatived, the Tribunal came to the conclusion that the property belongs to the smaller Hindu undivided family. In the absence of the partition deed and the declaration and on the basis of the material on record, we are of the view that the Tribunal was correct in coming to the conclusion that the property belonged to the smaller Hindu undivided family consisting of the assessee and his wife and, consequently, the finding of the Tribunal that the value of the property and the income therefrom have to be assessed in the hands of the smaller Hindu undivided family consisting of the assessee and his wife does not suffer from any infirmity.
8. For the aforesaid reason, the questions referred to us have to be answered in the negative, i.e., against the assessee and in favour of the Revenue.
9. The referred cases are accordingly answered.