JUDGMENT
In compliance with this Courts order dated October 4, 1940 in Miscellaneous Civil Cases Nos. 138 and 139 of 1937 the Commissioner of Income-tax of Central and United Provinces has submitted for this Courts decision under Section 66(3) of the Indian Income-tax Act of 1922 the question of law set out below :-
“Where a Hindu family consists of a daughter-in-law (the widow of the last surviving coparcener) and her mother-in-law (the widow of that last surviving coparceners father), do they form a Hindu undivided family within the meaning of that term as used in Section 55 of the Income-tax Act ?”
2. The facts are that up to and including the assessment for the year 1933- 34 based on the income of the previous year ended Diwali
1932 the assessments in this case were made in the status of a Hindu undivided family. The family was originally composed of Chunnilal and his wife Mt. Mulabai. Chunnilal died in the year 1933 survived by the widow Mt. Mulabai who after her husbands death adopted one Sheoratan. He also died in 1934 leaving behind his widow Mt. Pannabai (Minor) but no son with the result that the family now consists of Mt. Pannabai, the daughter-in-law, and Mt. Mulabai, the mother-in-law. The Income-tax Officer assessed Mt. Pannabai in the status of an individual for the years 1934-35 and 1935-36. The Commissioner of Income-tax upheld the Income-tax Officers order assessing Mt. Pannabai in the status of an individual and declined to make a reference to the High Court under Section 66(2) of the Income-tax Act for its on 4-10-40.
3. The main argument on behalf of the assessee is that she and her mother-in-law who is entitled to maintenance as a member of the joint family, constitute a Hindu undivided family and consequently that the assessments should have been on the footing of a Hindu undivided family. Reliance was placed on behalf of the assessee on Vedathanni v. Commissioner of Income-tax, Madras, Commissioner of Income-tax, Bombay v. Laxminarayan, Mst. Draupadi v. Vikram and Bajirao v. Ramakrishna, for the proposition that a Hindu joint family may consist of only female members. The two Nagpur cases are not in point as the questions there were dealt with purely as those arising under Hindu law and in no way related to the Income-tax Act. In Vedathanni v. Commissioner of Income-tax Madras, the question was whether the maintenance and arrears of maintenance received by a widow of a member of a joint family was exempt from taxation under Section 14(1) and other sections of the Indian Income-tax Act (XI of 1922). In that case there were some observations made that there could be a joint family with a single member provided that there were other members entitled to maintenance from the estate. In Commissioner of Income-tax. Bombay v. Laxminarayan the joint family was composed of an assessee, his father, mother and wife. They were possessed of ancestral property which on the death of the father devolved on the assessee by survivorship and thereafter the assessee, his mother and wife continued to live as members of an undivided family. It was held that the income of the assessee should be taxed as an income of a Hindu undivided family for the purposes of super-tax under Section 55 of the Indian Income-tax Act, 1922.
4. Both these cases were considered by their Lordships of the Privy Council in Kalyanji Vithal Das v. Commissioner of Income-tax, Bengal, which in our opinion concludes the question raised in this case. In that case the business was begun by two separated brothers Moolji and Purshottam and one Kalyanjij, a stranger, and their contribution to the capital was not from the ancestral funds. In 1939 Moolji made gifts of capital to each of his sons by his first wife, Kanji and Sew Das. Kanji and Chatur Bhuj, the brother of Kalyanji, were taken into the partnership. In 1930 Sew Das, Mooljis son, and Champsi, Kalyanjis brother, were also admitted in the firm as partners. The interest of Kanji and Sew Das was a gift from their father Moolji and that of Chatur Bhuj a gift from his brother Kalyanji. Moolji. Purshottam and Kalyanji each had son for sons from whom they were not divided. Their Lordships pointed out that the income from the firm received by each of them was clearly separate and self-acquired property of the partner and that as it was not thrown into the common stock it could not be regarded as an income of the joint family. It was therefore held that Moolji, Purshottam and Kalyanji were liable to be assessed as individuals and not as a Hindu undivided family.
5. While dealing with the cases of Kanji and Sew Das, sons of Moolji, their Lordships assumed that their interest in the firm, which was obtained from gift of their father Moolji, was ancestral property so that, if either had had a son, the son would have taken an interest therein by birth. Then their Lordships had to consider the question. “Does then the existence of a wife, or of a wife and daughter, make it income of a Hindu undivided family rather than income of the individual partner ?” Their Lordships answered the question in the negative on the ground that 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 had a conspiracy interest, but the mere existence of a wife or daughter does not make ancestral property joint. Their Lordships made it clear that though the word “interest” might be used of a wifes or daughters right to be maintained nevertheless that does not divest or impair the fathers ownership of the joint property whether that property is self-acquired or ancestral property belonging to himself alone.
6. Their Lordships further pointed out that the main question for consideration for the purpose of Section 55 of the Income-tax Act is not whether the assessee, his wife and daughter or other individuals entitled to maintenance constitute a Hindu undivided family but whether the income of the assessee is the income of the family and disapproved of the view taken by the Bombay High Court in Commissioner of Income-tax, Bombay v. Laxminarayan, that the income of an assessee having wife and mother constituting a Hindu undivided family was the income of the family. With reference to Vedathanni v. Commissioner of Income-tax, Madras, their Lordships observed that did not cover the question arising under Section 55 of the Income-tax Act.
7. The test as laid down by their Lordships of the Privy Council in the above mentioned case is whether the income received by an assessee is exclusively his own or the income of the joint family. If the income is his individual income and not if a Hindu undivided family he would rightly be assessed as an individual. This is precisely the case here. The assessee is the sole owner of the property which has devolved on her on the death of her husband. That property may be joint property and she and her mother-in-law may constitute in a broad sense a Hindu undivided family but the income she receives from the property can in no way be regarded as an income of the family. As pointed out by their Lordships of the Privy Council in Bijoy Gopal Mukerji v. Krishna Mahishi Debi, a widow on whom devolved the property of her husband is the owner of the property and that so long as she is alive no one has any vested interest in the succession. As Pannabai is the sole owner of the property and the entire income of the property belongs toher, the income is liable to be assessed as an income of an individual and not as an income of the joint family notwithstanding that it is subject to the right of maintenance in favour of her mother-in-law.
8. our answer to the question therefore is that the daughter-in-law and mother-in-law do not form a Hindu undivided family within the meaning of that term as used in Section 55 of the Income-tax Act, i.e., in relation to the income. Counsels fee Rs. 50.
Reference answered accordingly.