# COMMISSLONER OF WEALTH TAX, WEST BENGAL v. BISHW ANATH CHATTERJEE AND OTHERS

- **Citation:** [1976] 3 S.C.R. 1096
- **Court:** Supreme Court of India
- **Decided:** 1976-04-08
- **Case number:** Civil Appeal No. 1101 of 1969
- **Bench:** A. N. Ray, M. H. Beg, R. S. Sarkaria, P. N. Shinghal Ani> Jaswant Singh
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/commissloner-of-wealth-tax-west-bengal-v-bishw-anath-chatterjee-and-others-6733
- **Pages:** 7

## Headnote

Wealth Tax Act, s. 3-Coparceners goi·erned by Dayabhaga School of Hindu
Law-If could he assessed as Hindu Undivided Family.
llindu Law-Coparcener under Dayabhaga School-If could be t1ss~sscd as
Hindu Undivided Fan1ily.
Rejecting the respondents' plea that as persons governed by the Dayabhaga
School of Hindu Law they had held definite and determined shares in the
properties inherited by them. ·from their father and were liable to separate
assessment of wealth tax, the Wealtb. Tax Officer assessed them as a Hindu Undivided Family. On appeal the Appellate Assistant Commissioner held that the
properties should be taxed in the hands of the co-sharers ')eparately. On further
appeaJ, the Appellate Tribunal held that notwithstanding that there was no
unity of ownership amongst members governed by the Dayabhaga School of
Hindu La\V in respect of family property and each member thereof lwd no definite
share in it, such property, until partitioned, was assessable· to wealth tax in the
hands of the Hindu Undivided Family.
On reference, the High Court held
in favour of the assessee.
Dismissing the appeal to this Court,
HELD : Dayabhaga means partition of heritage.
A Dayabhaga male's
wife or sons or daughters have no ownership_ in his property during his lifetime.
Ownership of wealth is ve:-;led in the heirs by the death of their father, \Vhen
they become co-heirs and can clail}1 partition. The heritage of a Dayabhaga
male does not become the ioint property of the heirs or of the joint family
on the demise of the · Jast owner but becomes the fractional property of the
heirs in well-defined shares. That is why partition in Dayabhaga is defined
as an aCt of particularisin_g ownership. In Dayabhaga, the sons become tenants
in common and not joint tenants in respect of the estate inherited by them
from their father.
While ~fitakshara is known as the SchooJ of "aggregate
ownership", Dayabhaga is known as the school of "fractional ownership". The
essence of a coparcenary under the Mitakshara Law is unity of ownership;
under the Dayabha_ga it is unity of possession, not unity of ownership at all.
Under the Dayabha_ga school every .coparcener takes a definite share in the
property and he is the owner of that share which is defined immediately the
inheritance falls in.
[l 099D-G; 11 OOB·H]
Sreemutty Soorieemoney Dossee v. Denobundoo Mullick, 6 i\I.l.A. 526 at
p. 553.
G
1. Hindu Law by Colebrooke p. 9, 2. Law relating
to the
Joint
Hindu
Family (Tagore Law Lectures) by Krishna Ka1nal Bhattacharya, p. 168 and 3.
Principles of Hindu Law by l'rfulla (14th Edition) p. 348. Hindu Law & Usage,
by Mayne, 11th Edition 364, approved.
(i) Under s._ 3, the liability of wealth tax arises in respect of the net
wealth of the assessee.
The term "net wealth" means all the assets belonging
to the assessee, on the valuation date. The expression "belong" accordin_g to the
Oxford Dictionary means "to be the property or rightful possession of". [1098GH
HJ
(ii) The liability to wealth tax arises out of ownership of the asset and not
otherwise.
l\1ere possession or joint possession unaccompanied by the right to
or ownership of property would, therefore, not bring the property within the
I
C.W.T. v. B. N. CHATTERJEE (Shinghal, J.)
1097
definition of "net wealth", for it would not then be the asset belonging to the
A
assessee. ll099C]
In the instant case, the property in question \Vas the individual property
of the father of the respondents and it devolved on the heirs according to the
provisions
of
the
Hindu
Successio11
Act,
1956.
The
coparcenary had unity of possession but not unity of ownership on the
property.
Each coparceaer took a defined share in the property and was the
owner of his share.
Each such defined share thus belonged to the coparcener.
It was his net wealth within the meaning of s. 2(m) of the Wealth Tax
Act and was liable to \Vealth tax, as such, under s. 3.
[1102C-D]
Co1nniissioner of JVealth-tax, 1-Vest Bengal v. Gouri Shankar Bhar, (1972)
1
84 I.T.R. 69

## Text

A
B
c
D
E
F
1096
COMMISSLONER OF WEALTH TAX, WEST BENGAL
v.
BISHW ANATH CHATTERJEE AND OTHERS
April 8, 1976
[A. N. RAY, C.J., M. H. BEG, R. S. SARKARIA, P. N. SHINGHAL ANI>
JASWANT SINGH, JJ.]
Wealth Tax Act, s. 3-Coparceners goi·erned by Dayabhaga School of Hindu
Law-If could he assessed as Hindu Undivided Family.
llindu Law-Coparcener under Dayabhaga School-If could be t1ss~sscd as
Hindu Undivided Fan1ily.
Rejecting the respondents' plea that as persons governed by the Dayabhaga
School of Hindu Law they had held definite and determined shares in the
properties inherited by them. ·from their father and were liable to separate
assessment of wealth tax, the Wealtb. Tax Officer assessed them as a Hindu Undivided Family. On appeal the Appellate Assistant Commissioner held that the
properties should be taxed in the hands of the co-sharers ')eparately. On further
appeaJ, the Appellate Tribunal held that notwithstanding that there was no
unity of ownership amongst members governed by the Dayabhaga School of
Hindu La\V in respect of family property and each member thereof lwd no definite
share in it, such property, until partitioned, was assessable· to wealth tax in the
hands of the Hindu Undivided Family.
On reference, the High Court held
in favour of the assessee.
Dismissing the appeal to this Court,
HELD : Dayabhaga means partition of heritage.
A Dayabhaga male's
wife or sons or daughters have no ownership_ in his property during his lifetime.
Ownership of wealth is ve:-;led in the heirs by the death of their father, \Vhen
they become co-heirs and can clail}1 partition. The heritage of a Dayabhaga
male does not become the ioint property of the heirs or of the joint family
on the demise of the · Jast owner but becomes the fractional property of the
heirs in well-defined shares. That is why partition in Dayabhaga is defined
as an aCt of particularisin_g ownership. In Dayabhaga, the sons become tenants
in common and not joint tenants in respect of the estate inherited by them
from their father.
While ~fitakshara is known as the SchooJ of "aggregate
ownership", Dayabhaga is known as the school of "fractional ownership". The
essence of a coparcenary under the Mitakshara Law is unity of ownership;
under the Dayabha_ga it is unity of possession, not unity of ownership at all.
Under the Dayabha_ga school every .coparcener takes a definite share in the
property and he is the owner of that share which is defined immediately the
inheritance falls in.
[l 099D-G; 11 OOB·H]
Sreemutty Soorieemoney Dossee v. Denobundoo Mullick, 6 i\I.l.A. 526 at
p. 553.
G
1. Hindu Law by Colebrooke p. 9, 2. Law relating
to the
Joint
Hindu
Family (Tagore Law Lectures) by Krishna Ka1nal Bhattacharya, p. 168 and 3.
Principles of Hindu Law by l'rfulla (14th Edition) p. 348. Hindu Law & Usage,
by Mayne, 11th Edition 364, approved.
(i) Under s._ 3, the liability of wealth tax arises in respect of the net
wealth of the assessee.
The term "net wealth" means all the assets belonging
to the assessee, on the valuation date. The expression "belong" accordin_g to the
Oxford Dictionary means "to be the property or rightful possession of". [1098GH
HJ
(ii) The liability to wealth tax arises out of ownership of the asset and not
otherwise.
l\1ere possession or joint possession unaccompanied by the right to
or ownership of property would, therefore, not bring the property within the
I
C.W.T. v. B. N. CHATTERJEE (Shinghal, J.)
1097
definition of "net wealth", for it would not then be the asset belonging to the
A
assessee. ll099C]
In the instant case, the property in question \Vas the individual property
of the father of the respondents and it devolved on the heirs according to the
provisions
of
the
Hindu
Successio11
Act,
1956.
The
coparcenary had unity of possession but not unity of ownership on the
property.
Each coparceaer took a defined share in the property and was the
owner of his share.
Each such defined share thus belonged to the coparcener.
It was his net wealth within the meaning of s. 2(m) of the Wealth Tax
Act and was liable to \Vealth tax, as such, under s. 3.
[1102C-D]
Co1nniissioner of JVealth-tax, 1-Vest Bengal v. Gouri Shankar Bhar, (1972)
1
84 I.T.R. 699. explained.
.
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1101 of 1969.
From the Judgment and Order dated the 26th April 1968 of the
Calcutta High Court in Wealth Tax Matter No. 421 of 1964.
S. T. Desai, B. B. Ahuja, S. P. Nayar and R. N. Sachthey, for the
B
c
).
Appellant.
S. K. Sen, A. K. Nag and D. P. Mukherjee for the Respondents.
The Judgment of the Court was delivered by
SmNGHAL, J.
This appeal by certificate has come before us as the
question of law arising for decision is said to be of great importance.
The facts giving rise to the appeal are quite simple and may be shortly
stated.
D
One Bircswar Chatterjee,
who was admittedly governed by
the
Dayabhaga School of Hindu law, was assessed to income-tax as an
E
individual.
He died intestate on January 7, 1957, leaving his widow,
sons and daughters.
The Wealth-tax Ofticer rejected their plea that
on the death of Bircswar Chatterjee they held definite and determined
shares in his properties and were liable to separate assessment, and
assessed them as a Hindu undivided family for the assessment year
1958-59.
On appeal, lihe Appellate Assistant Commissioner held that
since the assessee was governed by the Dayabhaga School of Hindu
F
law, the properties could not belong to the Hindu undivided family
and were to be taxed "in the hands of the co-sharers separately."
The department took an appeal to the Income-tax AppeUate Tribunal,
'B' Bench, Calcutta.
There was difference of opinion between the
members of the Tribunal, and in accordence with the opinion of the
majority of llhe members it was ordered that "notwithstanding
that
there was no unity of ownership amongst members governed by the
G.
Dayabhaga School of Hindu law in respect of the family property and
each member thereof had definite shares in it, such property, until
partitioned, was assessable to wealth-tax in the hands of the Hindu
undivided family."
The Tribunal however referred
the following
question of law to the Calcutta High Court for decision,-
"Whether on the facts and in circumstances of the case,
fl
the Tribunal was right in holding that properties possessed
jointly by the members governed by the Dayabhaga School
of Hindu law were assessable to wealth-tax
jointly in the
status of a Hindu undivided family?"
1098
SUPREME COURT REPORTS
[1976] 3 S.C.R.
A
The High Court accepted the contention that the question assumed
that the property was owned jointly by the members of
a Hindu
B
c
D
E
F
G
H
undivided family governed by the Dayabhaga School of Hindu law,
· j
and reframed it as follows,-
I
"Whether on the facts and in the circumstances of the case,
the Tribunal
was right
in holding
that
the
property
possessed by the heirs of a Hindu male governed by the
Dayabhaga School of Hindu law were assessable to wcalthtax jointly in the status of a Hindu undivided family?"
It took the view that the matter was covered by its earlier decisions
including Commissioner of Wealth-tax. West Bengal v. Gouri Shankar
Bhar( 1) where it had been held that on the death intestate of a Dayabhaga male, his heirs do not inherit his estate as members of a Hindu
undivided family, and remain as co-owners with definite and ascertained
shares in the properties left by the deceased unless they voluntarily
decide to live as memb~rs of a joint family.
The High Court also
took notice of the fact that a suit for partition had been filed and a
preliminary decree had been obtained on July 4, 1959, and answered
the reframed question in the negative.
As has been stated, the lj:igh
Court has certified this to be fit case for appeal to this Court.
Mr. S. T. Desai appearing for the Commissioner of Wealth-tax has
challenged the view taken by the
High Court and has argued that
under the Dayabhaga School of Hindu law the property left by the
father is taken by the sons jointly by descent, as coparceners, as their
joint family comes into existance by operation of law.
He has
accordingly argued that the father's property is liable to be taxed under
section 3 of the Wealth-tax Act, hereinafter referred to as the Act,
as a unit until it is partitioned amongst its members by metes
and
bounds.
Reference has in this
connection been made to certain
commentaries and judgments and we shall refer to them as and when
necessary.
Section 3 of the Act is the charging section and the correctness or
otherwise of the view taken by the Hi.Qh Court depends on its meaning
and content.
The section provides for the charge of wealth-tax in
these terms.-
"3. Subject to the other provisions contained in this Act,
there shall be charged for every assessment vear commencing on and from the first day of April, 1957, a tax (heremafter referred to as
Wealth-tax) in respect of the net
wealth on the corresponding valuation date of every individual
Hindu undivided family and company at the rate or rates
specified in the Schedule."
The liability to wealth-tax therefore arises in respect of the "net
wealth" of the assessee, which expression has been defined as follows
in section 2(m) ,-
"(m) "net wealth"
means the
amount by
which
the
aggregate value computed in accordance with the provisions
---------
(!) (1968) 68 I.T.R. 345.
' .
\
C.W.T. v. B. N. CHATTERJEE (Shinghal, J.)
1099
of this Act of all the assets, wherever located, belonging to
the assessee on the valuation date, including assets required
to be included in his net wealth as on that date under this
Act, is in excess of the aggregate value · of all the debts
owned by the
assessee
on
the
valuation
date
other
than, . ..... "
The expression "belong" has been defined as follows in the Oxford
English Dictionary.-
"To be the property or rightful possession of." So it is the property
of a person, or that which is in his possession as of right, which is
liable to wealth-tax.
In other words,
the liability
to wealth-tax
arises out of ownership of the asset, and not otherwise. Mere possession,
or joint possession,
unaccompanied by
the right to, or ownership
of property would therefore not bring the property within the definition
of net wealth" for it would not then be an asset "belonging" to the
assessee.
The question is
whether the estate or
property of
Bireswar
Chatterjee could be said to belong jointly to his heirs, after his death?
It is not in controversy, and is in fact admitted, that the property
in question belonged to Bireswar Chatterjee who was its sole owner
in his life time and was assessed to income-tax as an individual.
His family consisted of his widow, sons and daughters and was governed
by the Dayabhaga School of . Hindu law.
Bireswar
Chatterjee's
property was therefore the heritage, or the wealth, which vested in his
heirs en his death.
According to Jimuta Vahana, his wife or sons
or daughters had no ownership in his property during his life time
for "sons have not ownership while the father is alive and free from
defect." (Hindu Law by Colebrooke, P.9) Ownership of wealth is
however vested in the heirs "by the death of their father" (page
54, supra) when they become coheirs and can claim partition.
It
is on this basis that "Dayabhaga" (partition of heritage) has been
expounded by Jimuta Vahana.
According to him, "since anyone
parcener is proprietor of his own wealth, partition at the choice even
of a single person is thence deducible." (page 16, supra). The heritage does not therefore become the joint property of the heirs, or the
joint family, on the demise of the last owner,
but
becomes
the
fractional property of the heirs in well defined shares.
This concept
of fractional ownership has been stated as follows by Krishna Kamal
Bhattacharya in his "Law relating to
the Joint Hindu Family"
(Tagore Law Lectures) with reference to the doctrine of negation of
the ~on's right by birth (page 168) ,-
"As a corollary of the doctrine set forth above, negativing
the son's right by birth, is another peculiar doctrine of the
Bengal School, that of what is called the 'fractional ownership' of the heirs, contrasted with the doctrine of 'aggre··
gate ownership expounded by all other schools."
That is why 'partition' in Dayabhaga is defined as an act of "particularising ownership", and is not the act of fixing diverse ownerships
on particular parts of an aggregate of properties as in Mitakshara. The
A
B
c
D
E
F
G
H
llOO
SUPREME COURT REPORTS
(1976] 3 S.C.R.
A
learned author has clarified the position in nnmistakable terms as
follows (pages 172-73),-
B
c
D
E
F
G
H
"From what has been said above, it is evident that there is
no unity of ownership in Bengal joint family, although there
may be something like a unity of possession." (Emphasis
added)
This is why Mitakshara is designated as the School of "aggregate
ownership", while Dayabhaga is known as the Sdhool of "fractional
ownership." As has been stated in Gopalchandra Sarkar Sastri's
"Hindu Jaw" (eighth edition page 4@5), while the joint family system
prevails in Bengal, "there cannot be a real joint family consisting of
father and sons during the father's life-time, inasmuch as joint property
which is the essence of the
conception of joint family, would be
wanting to make them joint."
This is why, accoring to the Bengal
School, the sons become tenants-in-common and not joint-tenants in
respect of the estate inherited by them from their father.
The position of joint family under the Dayabhaga Jaw has been
stated as follows in Mayne's Treatise on "Hindu Ldw and Usage"
(eleventh edition, page 364),-
"lt follows therefore that under the Dayabhaga Jaw, a
father and his sons do not form a joint family in the
technical sense having coparcenary property. But as soon as
it has made a descent, the brothers or other co-heirs hold
their shares in quasi-severalty.
Each coparcener has full
powers of dispo&al over his share which is defined and not
fluctuating
with births and . deaths as in the case of a
Mitakshara family and his interest, while still undivided, will
on his death pass on to his own heirs male or female or even
to his legatees .. "
That was stated to be the Jaw in Sreemutty Soorjeemoney Dossee v.
Denobundoo Mullick( 1).
The position has been dealt with in Mulla's "Principles of Hindu
Law" (fourteenth edition, at page 348), as follows,-
"The essence of a coparcenary under the Mitakshara law i§
unity of ownership.
On the other hand, the essence of
a coparcenary under the Dayabhaga law is untiy of possession.
It is
not unity
of
ownership
at all.
The ownership of the coparcenary property is not in the whole body
of coparceners.
Every coparcener takes a defined share
in the property, and he is the owner of that share.
That
share is defined immediately the inheritance falls in.
It does not fluctuate with births and deaths in the family.
Even before partition any coparcener can say that he is
entitled to a particular share, one-third or one-fourth. Thus
if A dies leaving three sons, B, C, and D, each son will
take one-tihird, and each on~ will be the owner of his onethird share.
The sons are coparceners in this sense that
'
'
(1) 6 M.1.A. 526 at p. 553.
i
I
I
C.W.T. v. B. N. CHATTERJEE (Shinghal, J.)
110 l
possession of the property inherited from A is joint. It
is the unity of possession
that makes
them coparceners.
So long as there is unity of possession, no coparcener can
A
say that a particular third of the property belongs to' him;
that he can· say
only after
a partition.
Partition then,
according to the Dayabhaga Jaw, consists in splitting up
joint possession and assigning specific portions of the property to the
several
coparceners.
According
to
the
Mitakshara law, it consists in splitting up joint ownership
and in defining the share of each coparcener."
In fact we find that a case somewhat similar to the one before
us arose when one Prafulla Chandra Bhar, a Hindu governed by the
Dayabhaga School, died intestate.
His mother, widow, ~hree sons
and one daughter survived him. Since the death took place before
the Hindu Succession Act, 1956 came into operation, he was succeeded by his widow and three sons, each inheriting one-fourth share in
the estate. Gouri Shankar Bhar, one of the sons, took out letters of
•
administration and filed a wealth-tax return in his capacity as adr-
ministrator describing the status of the assessee as a Hindu undivided
family.
The Wealth-tax Officer also treated the status as such, and
made the assessment.
Gouri Shankar however filed an appeal and
·contended that the family being governed by the Dayabhaga School,
the shares of the coparceners in the property of the deceased
were
definite and ascertained and !he assessment should not have been made
in their status as a Hindu undivided family and each member should
have been assessed separately upon the value of his share in the inherited property.
The Appellate Assistant Commissioner overruled the
·Contention and took the view that even
though the shares of the
coparceners were definite and ascertained, the income from the property of the family did not belong to the several members in specified
}(
shares but continued to belong to the Hindu undivided family as a
whole.
On further appeal, the Tribunal held that as the coparcener
under the Dayabhaga Jaw had a definite share in the property left by
the deceased and was legally the owner thereof, he had a defined share
and that since the wealth-tax was levied on the basis of ownership, it
was proper that the assessment should have been made on the individual
coparceners on their respective shares and assessment of the total
wealth in the hands of the undivided family would be illegal.
The
matter was r'1)'erred to the High Court at the instance of the Commi-
·ssioner of Wealth-tax.
The High Court of Calcutta in Commissioner
t
of Wealth-tax case (supra) made a reference, inter alia, to the decision
in Biswa Ranjan Sarvadhikari v. Income-tax Officer, F. Ward District,
(2) Calcutta(') and upheld the view that where property is owned by
two or more persons governed by the Dayabhaga School and their
shares are definite and ascertainable, then, although they are in joint
possession, the tax will be assessed on the basis of the share of the
income in the hands of the assessee and not as of a Hindu undivided
family.
It was held that the position was not different under the
:-Vealth-tax Act.
The 1'.1~tter was brought to. this Court on appeal and
1t was conceded by Solicitor General appeanng for the Commissioner
of Wealth-tax that as the property was the individual property of the
(I) (1963) 471.T.R. 927.
B
c
D
E
F
G
H
A
B
c
D
1102
SUPREME COURT REPORTS
[1976] 3 S.C.R.
deceased, it devolved on his heirs in severalty. It was held that as
each of them took. a definite and separate share in the property, each of
· ·l
them was hable, m law, to pay wealth-tax as an individual.
While
upholding the decision of the High Court it was however observed by
,J,
·
this Court that it was not necessary to decide, in that case, whether a
Dayabhaga family .could be considered as a Hindu •undivided family
within the meaning of section 3 of the Act:
That decision is
Commissioner of Wealth-tax, West Bengal v. Gauri Shankar Bhar.(')
In the case before us, it is not in dispute that the property in
question was the individual property of Bireswar Chatterjee and that
it devolved on his heirs according to the provisions of the Hindu
Succession Act, 1956.
It will be recalled that a suit for partition
was filed on June 21, 1957 and a preliminary decree was passed on
July 4, 1959.
For reasons already stated, the coparcenary
had
unity of possession but not unity of ownership on the property. Each
coparcener therefore took a defined share in the property and was
the owner of his share.
Each such defined share thus "belonged" to l
the coparcener. It was his "net wealth" within
the meaning of ".
section 2(m) of the Act and was liable to wealth-tax as such under
section 3.
The High Court was therefore
right in answering the
rcframed question in the negative, and as we find no force in the
argument of Mr. Desai, the appeal fails and
is dismissed with costs.
P.B.R.
(l) (1972) 84 f'T.R. 699.
725 SCl/76-GlPF.
Appeal dismissed,
I