Williams, J.

This is a case stated under Section 66(2) of the Income TaxAct (XI of 1922).

Originally the question of law submitted for the opinion ofthis Court was "whether in the circumstances recorded in this case,assessees share of income from the firm of Moolji Sicka and Company isassessable against him in the status of a Hindu undivided family or of anindividual."

The firm of Moolji Sicka and Company was first registered asa partnership of five persons and their shares were assessed as individuals.Each of the partners contended that they ought to be assessed as five Hinduundivided families.

The Commissioner found as a fact that none of the assesseeshad succeeded in proving that they had thrown their separate income into commonstock. This was in respect of the 1930-31 assessment and was based on apartnership deed of 1919.

The present case arises on the assessment for 1931-32 and isfounded on a partnership deed of 1930.

The facts which have been found show that the firm wasstarted in 1912 by Moolji Sicka, his brother Purushotham and Kalyanjee withfunds which were not ancestral. The funds of Moolji and Purshotham wereapparently derived from their mother. These two were not joint at any materialtime.

In 1919 a deed of partnership was executed and Kanji,Mooljis son, and Chathurbhuj, Kalyanjees brother, were added as partners, aboutthe same time, Moolji married a second wife, which led to family complications,and he and his sons decided to live apart. He transferred to each of them apart of his interest in partnership, and his first wife went to live with them.Kalyanji and his brothers Chaturbhuj and Champsi also agreed to liveseparately, and Kalyanji, transferred a part of his interest to each of them.

For several years difficulties were experienced by theincome tax authorities in obtaining any satisfactory accounts from the firm,and in 1930 steps were taken, under Section 34 of the Act, against theassessees. One result was that a further deed of partnership was executed underwhich Sewdas (another of Mooljis Sons) and Champsi, the other brother ofKalyanji, became partners, and shares were allotted to them.

Moolji lives in Bombay and has a son by his second wife.Purshotham lives in the same house and has a son and daughters. Apparently heno longer takes any active part in the business. Kalyanji is at the firmsbranch at Gondia. He has three sons and daughters. Chaturbhuj has a daughterbut no son. He and Champsi are at Gondia. All these live separately. Kanji andSewdas live in the same house with their mother, but they live separately.Kanji has daughters only. Sewdas has no issue, but includes his mother in hisalleged family.

It has been found as a fact that none of the assessees hasmade any assignment to any joint family accounts or for any joint purposes. Theopinion of the Commissioner was that as the shares of Moolji, Purshotham andKalyanji were all self-acquired without the employment of any ancestral funds,and as there was not proof that any of them had thrown his share into commonstock, the shares were to be deemed individual for the purpose of income tax.He decided that as Chaturbhujs share came from his brother Kalyanjisself-acquired property, and he has no son, and as there was no proof of hishaving thrown his share into the common stock of a non-existent coparcenary,the share remained individual. Further, he decided that even if Kalyanjisseparate property could have been treated as held in coparcenary, with hisbrothers prior to 1919, yet after the partition (if any) the shares wereseparate and individual. That even assuming that Kanji and Sewdass shares weregifts by their father out of self-acquired property, there was no proof ofMooljis determination that the shares were to be held by either as ancestralproperty, and that though it might became ancestral if sons were born to Kanjiand Sewdas, it cannot at present be regarded as other than separate andindividual. Further he held that even if Mooljis self-acquired property wasbeing held in common stock in 1919, yet after the partition it had becomeseparate and individual.

He stated that at the time of assessment none of theassessees claimed to be a karta of a Hindu undivided family, nor did they sodescribe themselves in the returns made by them, nor in their petitions to theIncome Tax Officer, not in their applications for registration of the firm andno such description is mentioned in the partnership deeds. Until the appeal tothe Assistant Commissioner, they did not suggest that they were other thanindividuals so far as taxation under the Income Tax Act was concerned. It isalleged that in a former affidavit relating to some prior assessment some ofthe assessees claimed that they were kartas of Hindu undivided families, butthis evidence is not before us and forms not part of the present case.

This reference by the Commissioner was made on the 8th June,1933. At or about that time, certain further affidavits were filed. The Commissionersays, in an Appendix to the Paperbook that the application for reference to theHigh Court was made on the 14th January, 1933. Appellants were heard on variousdates up to the 3rd May, and the Commissioner stated the case on theinformation on record up to that date. Subsequent to the drafting of thereference, three affidavits were filed which the Commissioner has appended tothe case at the request of the applicants. Concerning those affidavits, theCommissioner says that in his opinion they ought not to be considered, that thestatements contained in them are contrary to the facts recorded, and that therewas no evidence of any of the assessees having thrown his property into commonstock. It is to be noted in passing that in all the three affidavits thedeponents state that they always treated their earnings as belonging to theirjoint families, and nowhere state that these earnings were in fact jointproperty.

Upon consideration of the case stated, the Court decidedthat the findings of fact were not specific or sufficient nor were theyproperly stated, and referred the case back to the Commissioner and we have nowto consider the Supplementary Statement made under Section 66(4).

In the meantime, the Commissioner was succeeded by anotherCommissioner, and this Commissioner states that the circumstances which wererecorded by his predecessor in the several cases were as follows :-

(1) Mooljis case :- He does not claim to be a member of anyancestral undivided family. His case is that he is separate from his brothersand from his sons by his first wife, that he is living with his second wife anda male child by her, and that he and they constitute a Hindu undivided family.The fund with which he started the business was not ancestral. He became a partnerin his individual capacity and not as representing any family. His share alwayswas self acquired. He failed to prove that it was thrown into common-stock. Hestarted the partnership in 1912 with his self acquired funds and in hisindividual capacity, and even if it be assumed that this became a joint fundwith his sons then by partition in 1919, he ceased to have a joint fundthereafter. He kept his capital in and earnings from the partnership as his ownseparate property, and all that he did in 1919, was to make a gift to each ofhis sons of a certain amount of money wherewith they became partners.

(2) Purshotam :- His case is that he is separate fromMoolji, and not a member of any ancestral joint family. He is living with hiswife and an infant son and daughter. He claims that they institute a Hinduundivided family. He also became a partner in his individual capacity and notas representing any family. His capital was self-acquired property. Noancestral funds were employed in obtaining his partnership. He failed to provethat his earnings were thrown into common-stock.

(3) Kalyanji :- He is not a member of an ancestral jointfamily. His family consist of his wife, three male children and a daughter. Heis not joint with his brothers. They live and mess separately. He became apartner in his individual capacity without employing any ancestral funds. Hisshare is self-acquired. He has failed to prove that his earnings were throwninto common stock. He became a partner in 1912 with his self-acquired funds,and always acted in his individual capacity. What he did in 1919 amountedmerely to the making of a gift of part of his own money to his brother. Even ifthe capital and the earnings are to be taken as joint up to 1919, since 1919when this alleged partition occurred, the property of each of them becameseparate.

(4) Chaturbhuj :- His family consist of himself, his wifeand a daughter, and no male child. He is not a member of an ancestral jointfamily. His share in the capital was transferred from Kalyanjis account in thefirm. He has failed to prove that his earnings were thrown into common stock.Even assuming that he was joint with his brother before 1919, what he got as aresult of the partition in that year became his separate and self-acquired property.

(5) Kanji :- He is Mooljis son by his first wife. Heseparated in 1919. His family consist of his wife and daughter and no malechild. He and his brother Sewdas live in one house with their mother, and messtogether. His share of the capital came by way of transfer from Mooljisaccount. This was really a gift by Mooljis account. This was really a gift madeby Moolji out of his own self-acquired money.

The Commissioner states that he accepts the he accept theevidence of his predecessor and finds the facts again as found by him. Inaccordance with the directions of this Court he has carefully examined theevidence and has enquired further into the following matters in particular.

1 (a) Whether the capital in the firm belong to theassessees in their individual capacities

1 (b) Whether entered into the partnership as representingthe family, or acted in any way on behalf of the family when entering into thepartnership

(2) Whether there is any common stock of the family

(3) Whether the assessees treated their earning as belongingto the family Or have they kept their earning separate or have they thrownthem into common stock

(4) Who are the members of the family of each of theassessees

(5) Whether the family of the assessees as it now stands isa Hindu undivided family within the meaning of the Income Tax Act

He states, and this is correct that the last question in itsnot a pure question of fact, and he formulates two further question stated byhis predecessor.

(1) Whether the family of the assessee as it now stands is aHindu undivided family within the meaning of the income Tax Act

(2) If the first question be answered in the affirmativewhether in circumstances recorded in the case the income in question should betreated as income of that family and assessed as such

On further consideration he finds the following facts :

1 (a) The nucleus of the capital with which the threeoriginal members of the firm, viz., Moolji, Purshottam and Kalyanjee startedthe business was not ancestral. The capital supplied by them belonged to theseassessees in their respective individual capacities and was their self-acquiredproperty As regards the capital supplied by the three added members (viz.,Kanji, Chatubhuj and Shewdas), this also belonged to them in their individualcapacities because they got it by way of gift, and it was their self-acquiredfund.

1 (b) On the question whether or not all of them purportedto act for the family in the partnership, he refers to the fact that in none ofthe deeds of partnership are they described as Kartas of Hindu undividedfamilies nor is he satisfied that the alleged partition between Mooljee and hissons, was, in fact a partition of property which, previous to that date hadbeen joint family property. He says that the evidence before him was notsufficient to establish it.

With regard to the three additional affidavits theCommissioner came to the conclusion that these had been filed because theassessees realized the defects in their case and wished to strengthen. He saysthat he attaches no value to these affidavits, which I understand to mean thathe does not believe the facts stated therein. He says also that he was notsatisfied with the explanation given that the accounts of the business havebeen mislaid, and it is obvious from his statement, that he came to theconclusion that the assessees were keeping back accounts in order to preventthe Commissioner from inquiring too closely into the extent of the businesswhich they were carrying on. The result was that he found as a fact that therewas no joint family fund in any of the cases, that each of the partners becamepartners with their separate self-acquired funds, and that none of them threwtheir funds into the common stock of their respective families. In fact, therewas no evidence that there ever had been any common stock.

Apart from these affidavits, he says that there is noevidence that Kanji and Sewdas got their shares from their father by partition,or that Chaturbhuj got his share from his brother Kalyanji similarly. Indeed atthe last hearing before him it was admitted that the original of Kalyanjiscapital was unknown, and he was asked to presume that Kalyanji had ancestralproperty which was later divided. Except for the three affidavits stating thateach of assessee maintain his family out of his earnings, he found that therewas no evidence to show that either property or earnings had been thrown intocommon stock, or that the income had been treated as income of the family. Theassessees kept the properties at their own absolute disposal.

The Commissioner then dealt with the question, what is aHindu undivided family within the meaning of the Act, whether it connotes afamily having coparcenary property, and he quoted from Maynes Hindu Law, 9thEdition, 346, the following - "Section 269. It is evident that there canbe no limit to the numbers of persons of persons of whom a Hindu joint familyconsists, or to the remoteness of their descent from the common ancestor, andconsequently to the remoteness of their relationship from each other. But theHindu coparcenary, properly so-called, constitutes a much narrower body. Whenwe speak of a Hindu joint family as constituting a coparcenary, we refer not tothe entire number of persons who can trace from a common ancestor, and amongstwhom no partition has ever taken place; we include only those persons who byvirtue of relationship, have the right to enjoy and hold the joint property, torestrain the acts of each other in respect of it, to burden it with their debtsand at their pleasure to enforce its partition. Outside this body, there is afringe of persons who possess inferior rights such as that of maintenance, orwho may under certain contingencies, hope to enter into the coparcenary",and he arrived at the conclusion that the legislature, in using the expressionHindu undivided family, had in view a family which in the eye of law is theowner of the income, and did not intend the expression to connote a merecombination of persons who have no legal claim to such income, or right toinsist on a division on such income. Therefore he held that in none of thesecases was there a Hindu undivided family within the meaning of the Income TaxAct.

Further he stated his opinion that even if he were wrongupon the first point, yet in view of the facts found that the income of each ofthe assessees was self-acquired, and there had been no waiver by the acquiresof their separate rights, the income in each case remained individualthroughout, and was rightly assessed by the Income Tax Officer as that of anindividual.

In this case, a good deal of time and trouble has beencaused by the inability of the Commissioners to distinguish between questionsof law and question of fact. The result has been that, being in doubt, theyhave left a considerable part of their own burden to be discharged by thisCourt. This task is really not very difficult if the Commissioner will make aneffort to think clearly. The origin and source of property, or income arematters of fact. Whether property or income has been treated as separate or asancestral, or joint is a question of law, or of mixed law and fact. Whetherproperty or income has been treated as separate or has or has not been throwninto common stock are question of fact. But whether the alleged owners areentitled to treat it as separate, or whether it must be regard as joint, is aquestion of law or of mixed law and fact. In this case, all question of purefact have been found against the contention of the assessees.

The first question of law to be decided is, what is meant bythe expression "Hindu undivided family," in the Income Tax Act. Ihave already referred to a quotation from Mayne on this point, and the remarksof the late Sir Dinshaw Mulla at page 230 of the 7th Edition of his work onHindu Law are similar. Is the meaning to be restricted to the narrower, orextended to the wider body mentioned by these authors, that is to say, is to berestricted to the coparcenary, or extended to the Hindu joint family

The necessity for making Hindu undivided families liable assuch for income tax was, that the income and property of Hindu undivided familyis undivided. The members have no separate income or property and cannot,therefore, be taxed as individuals. According to Mitakshara, until partition itcannot be said of any member that he has any definite share in the jointproperty. But an Income Tax Act obviously is concerned only with incomeavailable for taxation and the owners of such income, and if there is no propertyor no income, an Income Tax Act has no application to a Hindu undivided familyin the wider sense to which I have referred. Its provisions are attracted onlywhere there exists property or income, that is to say, where there is jointfamily property or joint family income or, in other words where there exists aHindu coparcenary.

Mr. R. C. Ghose, Mr. Hira Lal Chakravarty and Mr. PabchannanGhose on behalf of various assessees have raised most interesting arguments toprove that a Hindu undivided family may be in possession of joint property orincome in the absence of the existence of any coparcenary. They have pointedout that both wives and daughters have wives and daughters have rights ofmaintenance, and the sons have certain rights even in their fathersself-acquired property. Consequently they have contended that these areco-owners, through they may not be co-parceners. To take one example. Where twobrothers with wives, or wives and daughters, but no son are co-parceners, andone brother dies, their contention is that the Hindu undivided family does notcome to an end, though the coparcenary does, because there must be twoco-parceners at least, and neither wife nor daughter can be co-parceners.Similarly, it has been argued that the self-acquired property in the hands ofhis son, ever though he may not have sons of his own alive or yet born.

Undoubtedly there are parts of the text of Mitakshara andjudicial decisions which support such a view. Thus with reference to the effectof a bequest of self-acquired property by father to his son, it is stated inSastris Hindu law, 7th Edition, at page 345, that there is great diversity ofopinion on this point which was left open by the Privy Council in the case ofLala Ram Singh v. Deputy Commissioner of Partabgarh (50 I. A. 265). The authorrefers to the relevant texts from the Mitakshara, to which my attention hasbeen drawn, and comes to the conclusion that a gift of self-acquired propertyby the father becomes the self-acquired property of the son, unless the donorlimits the rights of the son in express terms. On the other hand, at page 361,he admits that according to the Mitakshara, a son acquires from his birth aright also to the self-acquired property of his father, but states that thecharacter of this right materially differs from that acquired in ancestralproperty.

But Mulla in the 7th Edition, at page 239 states that theself acquired property of Hindu belongs exclusively to him. No other member ofthe coparcenary, not even his male issue, acquires any interest in it by birth.He may sell it or he may make a gift of it or bequeath it by Will to any personhe likes. It is not liable to partition and on his death intestate, it passesby succession to his heirs, and not by survivorship, to the survivingco-partners, to the surviving co-parceners, Katama Natchiar v. The Raja ofShivagunga (1863) 9 M. I. A. 543 and 613. In my opinion, this is the correctview, and the decisions in the cases of Muddun Gopal v. Ram Buksh (1863) W. R.71 and Hazari Mall Baby v. Abaninath Adhurjoya (17 C. W. N. 280) mean no morethan that self-acquired property given by a father to his son, becauseancestral in the hands of the son only upon the birth of his son, that is tosay, it is ancestral property in the hands of the son vis-a-vis his son orsons. It is to be observed also that these decisions have reference only toimmovable property. Dr. P. N. Sen in his book on Hindu Jurisprudence, being theTagore Law Lectures for 1909, states at 1909, states at 129-131, that, as heunderstands the Mitakshara, the right acquired by a son by birth in theproperty of his father is not limited to any particular kind of property, butextends over all the property of the father, however acquired, although theextent of the rights is not everywhere the same, but depends on the nature ofthe property. He then discusses the various texts at length and shows that theyare conflicting and attempts to reconcile them. Their Lordship of the PrivyCouncil in the case of Rao Balwant Singh v. Rani Kishori (25 I. A. 54) observesthat "All these old text-books and commentaries are apt to might religiousand moral considerations, not being positive laws, with rules intended forpositive laws." This fact undoubtedly gives rise to the difficulties whichare met with in attempting to construe the various and apparently discrepanttext of the Mitakshara, and I sometimes wonder, when it becomes my duty toconsider them or to dissolve the various dilemmas which have arisen inattempting their interpretation, especially in a case such as this, where wehave to consider ancient texts in an attempts to construe the terms of a modernAct of the legislature.

With regards to the right of maintenance etc., of wives anddaughters, several authorities have been quoted to show that they certainrights of co-ownership in their husbands or fathers property. This matter isdiscussed Banerjees Marriage and Stridhana, 3rd Edition, at p. 146 andfollowing pages. The author draws attention to the rights of a wife to a shareon partition and shows that, in one sense, the wife has been regarded as aco-owner with her husband. Sir Dinshaw Mulla, at p. 577 of the Edition to whichI have already referred, describes the right of a wife to maintenance by herhusband as a matter of personal obligation. He says that "maintenancebeing a matter of personal obligation, the wife has no claim for maintenanceagainst her husbands property in the hands of a transferee from him." Onthe other hand, Mayne, in the 9th Edition, says that the "right of a widowto her maintenance arises by marriage and that of daughter by birth, it existsduring the life of the father and continues after his death. In is a legalobligation attaching upon himself personally and upon his property. He cannotfree himself from it during his life-time, and it attaches upon the inheritanceimmediately after his death. It seems, therefore, contrary to principle to holdthat, by devising the property to another, he could authorise that other tohold it free from claims which neither he himself nor his heir could haveresisted." Gopal Chandra Sarkar Sastri in the 7th Edition of his work on"Hindu Law"at p. 362 discusses the character of ownership in HinduLaw. He says that "ownership or rather co-ownership has a peculiar meaningin Hindu Laws persons entitled to some of the rights that constitute ownershipor dominion or property in modern jurisprudence, are called co-owners in HinduLaw of the person having all the person having all the rights included inownership; the wife is declared to become co-owner of the husband from the timeof their marriage... The wife and the male issue hold a subordinate positionwith respect to the ownership of the property of the husband and of thepaternal ancestors respectively."

Whatever these rights may amount to, I am satisfied that theIncome Tax Act is not concerned with them, and that the legislature did notintend to enact and has not enacted that a Hindu undivided family in thesewider senses is a proper objects for taxation under the Income Tax Act. If itwere otherwise, a most absurd and unanticipated position would arise. EveryHindu possessing property or income who married would, ipso facto, become withhis wife a Hindu undivided family and subject to taxation as such. The IncomeTax Act, so far as Hindus are concerned as individuals, would apply only tobachelors. This cannot have been intended. In my opinion therefore where in thesections of the Income Tax Act a Hindu undivided family is mentioned, a Hinducoparcenary is meant.

This is sufficient to dispose of the cases of Kanji, Sewdasand Cahturbhuj. Whichever is the correct view about self-acquired property, itseems to me to make no difference to the decision in this case. Whether Kanjisinterest in this firm is in law self-acquired or ancestral property isirrelevant. The crucial point is the existence or otherwise of a coparcenary.Kanji, Sewdas and Chaturbhuj have no sons, and it is beyond dispute that underHindu Law females cannot be co-parceners. There cannot be coparcenary withoutco-parceners. There must be a coparcenary in fact before there can be one inlaw. In the absence of sons it is clear that neither Kanji, Sewadas orChaturbhuj can possibly be regarded as members of three separate coparcenaries.A coparcenary under the Mitakshara can only start with the birth of a son, asstated in Mulla, 7th Edition, at page 326.

The position with regard to Moolji, Purshottam and Kalyanjiis different. Each has no son or sons. But it has been found as a fact in eachcase that the origin of their capital was in no sense ancestral, and that theyhave always treated it as separate, and have never thrown either property orincome into common stock. Mr. Pugh has argued on behalf of Moolji that thestatement in his affidavit, that the property was joint, amounted to adeclaration which was irrevocable, and ipso facto created a coparcenary ofwhich the members were himself and his son, and that his son became thereuponclothed with all the rights of a Hindu co-parcener and could ask for partitionand claim his share in the property.

But such a statement is only evidence which goes to provethe intention of the market. As Sir Dinshaw Mulla states at p. 249 of theEdition to which I have already referred "Property which was originallythe separate or self-acquired property of a member of a joint family may becomeJoint Family Property, if it has been voluntarily thrown by him into the commonstock with the intention of abandoning all separate claims upon it. A clearintention to waive his separate rights must be established, and it will not beinferred from the mere fact of his allowing the other members of the family touse it jointly with himself." Such a statement as is contained in theaffidavit is not conclusive. It may have been made and, in the opinion of theCommissioner, was made in order to defeat the claims of the Income TaxAuthorities. It has been disbelieved by both Commissioners. If the son everclaims co-paracenary right against his father, this statement may available asevidence against him, though even this is not certain, having regard to thepositions of Section 54 of the Income Tax Act. But it is not conclusive anymore than a declaration about a desire to separate is conclusive evidence ofintention upon the question whether a partition has been effected or not. TheCommissioner has found in all three cases that there was, in fact, no suchintention, and the property was never thrown into common stock, but was alwaystreated as separate.

The result is that the answer to the first question put bythe Commissioner must be in the negative; the second question therefore doesnot arise.

The assessees must pay the costs of this reference,exclusive of any extra costs caused by the reference back. Costs to be taxed bythe Taxing Officer.

R.E. Jack, J.

I agree.

.

In Re: Moolji Sicka and Ors. (13.12.1934 - CALHC)