# GOWLIBUDDANNA v. COMMISSIONER OF INCOME-TAX, MYSORE, , BANGALORE - **Citation:** [1966] 3 S.C.R. 224 - **Court:** Supreme Court of India - **Decided:** 1966-01-10 - **Bench:** K. Sudda Rao, J. C. Shah, S. M. Sier! - **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/gowlibuddanna-v-commissioner-of-income-tax-mysore-bangalore-3699 - **Pages:** 11 ## Headnote lnces net state or imply that a Hindu undivided family must consist of at least tw• 111cmbcrs entitled to claim partition. The text Qf the cla11s11 furni51!es a clear indication to the contrary. A B c D E Reliance was also places upon the form of "Rwturn" prescribF ell u1tiu the lfoles, whicil. by s. 5'!1 of the Income-tax Act, l '22 have 11ffect as if enacted in the Act. Part IIIA of the Form prescribes certain particulars to be incorporated in the case ef a Hinti11 untlividce family, viz. names of members of the family at the end of the previous year who were entitled to claim partition, relatienship, age at the end of the previous year and remarks, wt G thereby it is not intended that a Hindu undivided family as an ass.ssable entity does not exist so long as there are not at least twe or more members entitled to claim partition. The information is required to be given in Part illA of the Form merely to enable the Income-tax Officer to consider which of the two parts of the proviso in the First Schedule to the relevant Finance Act II prescribing the limit of exemption in respect of the Hindu undivided family applies. "' .... / 4: ) r . _, • BUDDANNA V, C. I. T. (Shah, J.) 229 A Sub-section ( 1) of s. 25-A on which reliance was placed also does not imply that a Hindu undivided family must consist of more male members than ene. The sub-section only prescribes the procedure wher.::by the memb6rs of a family which has llitherto looen assessed in the status of a Hindu undivided family may obtain an ordtr that they may, because of partition of the joint B status, be assesstd as stparated members. The clause is purely procedural: it dees not en.act either expressly or by implicatfom that a Hindu undivided family assessed as a unit must consist of at least two male members who are capable of demanding a partition. c Counsel for the appellant placed strong reliance upon certain observations of the Judieial Committee in the judgment in Kalyanji Vlthaldas's case(') in which they disapproved of the view expressed by the Bern.bay High Court in Commissioner 0f lncumetax, Bombay v. Gomedalli Lakshminarayan('). In the case D decided by the l'l0mbay High Court a joint family c0nsisted of a father and a son and their respective wives. The father died, and in the year of assessment th.~ joint family consisted of the son, his mother and his wife. In dealing with the question referred by the Commissioner of Income-tax whether the income received by the son should be regarded as his individual income or as the E income of a Hindu undivided family for the purpose of assessment to super-tax under the Indian Incom-e-tax Act, the B0mbay High Court held that the expression "Hindu undivided family" as used in the Income-tax Act includes families consisting of a sole surviving male member and female members emtitled to mainten&nce, and the ineome of the assessee should therefore be treated u the F income of a Hindu undivided family. In Kalyanji Vithaldas's case(') which dealt with a group of appeals from the judgment of the Calcutta High C«iurt in In re M~lji Sicka & Others(•) the Judicial Committee o9served : G B "Tile High Cowrt ( ef Calcutta) approached the cases by considering first whether the assessee's famiiy was a Hindu uadivialei family, and in the end left unanswered the questil'>n whetlter the inc0me under assessment was the inc•me of that family. This is due no doubt to the way iu. which the Commissio11er haci stated the questions. But, after all if the relevant Hindu law had been that the income belonged, not to the assessee (I)~ I.T.R. 90=L.R. 64 I.A. 28. (2) 3 I.T.R. 367. (3) 3 I.T.R. 123. 230 SUPllBME COU.T REPORTS (1966)3 S.C.R. himself, but to the assessce, his wife and daughter joint· ly, it is difficult to sec how that association of indivi· duals could have been refused the description "Hindu joint family". Tho Bombay High Court, on the other hand, in Laxmi· naraya11°s case having held that the assesscc, his wife and mother were a Hindu undivided family, arrived too readily at the conclusion that the income was the income of the family."' The Judicial Committee further observed : "Under Section 3 or Section 55 income is not to be attributed to any one of the five classes of persons mentioned by any loose or extended interpretation of the words, but only where the application of the words is warranted by their ordinary legal meaning . . . • In an extra legal sense, and even for sonic purposes of legal theory, ancestral property may perhaps be described, and usefully described, as family property; but it does not follow that in the eye of th.e Hindu law it belongs, save in cel1ain circumstances, to the family as distinct from the individual. By reason of its origin a man's property may be liable to be divested wholly or in part on the happening of a particular ·event, or may be answerable for particular obligations, or may pass at his death in a particular way; but if, in spite of all such facts, his personal law regards him as the owner, t'ie propel1y as his prope11y and the income therefrom as his income, it is chargeable to income-tax as his, i.e. as the income of an individual. In their Lordships' view it would not be in consonance with ordinary notions or with a correct interpretation of the law of the Mitakshara, to hold that property which a man has obtained from his father belongs to a Hindu undivided family by reason of his having a wife and daughters." A B c • • F G The facts of the cases which were decided by the Judicial Committee need to be scrutinized carefully. Before the Judicial Committee there were six appeals by six partners of the firm Moolji Sicka: they were Moolji, Purshottam, Kalyanji, Chaturbhuj, Kanji and Sewdas. Moolji, Purshottam and Kalyanji had H each a son or sons from whom he was not divided. But the income of the firm, which had to be a!sessed to super-tax was the separate t . , ·-• ...... • BUDDANNA V. C. I. T. (Shah, /.) 231 A income. of each of these partners. Chaturbhuj had a wife and daughter but no son, and the income was bis separate property. Kanji and Sewdas, sons of Moolji, were marrie~ me~, but nei~er had a son : they received by gift from Mool11 their respective interests in the firm, and for the purpose of the case it was ass\Jmed that the interest of each was ancestral property in which if he Il · had a son the son would have taken an interest by birth. But no son having been born, the interest of Kanji and Sewdas in the property was not diminished or qualified. The Judicial Committee held that the wife and the daughters of a Hindu had right to maintenance out of his separate property as well as out of his c coparcenary interest, but the mere existence of a wife or daughter did not make ancestral property in his hands joint. They observed: " 'Interest' is a word of wide and vague significance, and no doubt it might be used of a wife's or daughter's right to be maintained which right accrues in the D daughter's case on birth; but if the father's obligations are increased, his ownership is not divested, divided or impaired by marriage or the birth of a daughter. This is equally true of ancestral property belonging to himself alone as of self-acquired property." E The Judicial Committee accordingly held that in none of the six appeals before them could the income falling to the shares of the partners of a registered firm be treated as income of a Hindu undivided family and assessed on that footing. In the view of the Judicial Committee, income received by four out of the six partners was their separate income: in the case of the remaining F two partners the income was from sources which were ancestral. But merely because the source was held by a member who had received it from his father and was on that account ancestral, the income could not be deemed for purposes of assessment to be income of a Hindu undivided family, even though Kanji had a wife and a daughter, and Sewdas had a wife who had rights to be G maintained under the Hindu law . In Gomeda/li Lakshminarayan's cas.e(') the property was ancestral in the hands of the father, and the son had acquired by birth an interest therein. There was a subsisting Hindu undivided family during the life-time of the father and that family did H not come to an end on bis death. On these facts the High Court of Bombay held that the income received from the property wa<> (I) 5 I.T.R. :167. Lt OSupCJ /66-2 232 SUP.REME COURT REPORTS [1966] 3 S.C.R. liable to super-tax in the hands of the son who was the surviving A male member of the Hindu undivided family in the year of assess- · ment. This distinction in the facts in the case then under discussion and the facts in Gomedalli Lakshminarayan's case(') was not adverted to and the Board observed in Kalyanji Vithaldas's case( 2 ) that the Bombay High Coun "arrived too readily at the conclusion that the income was the income of the family." When 8 Gomeda//i Lakshminarayan's case(') was carried in appeal to the Judicial Committee, the Board regarded themselves as bound by the interpretation of the words "Hindu undivided family" employed in the Indian Income-tax Act in the case of Ka/yanji Vithaldas(Z), and observed that since the facts of the case were not in any material respect different from the facts in the car!i.cr case, C the answer to the question referred should be that "th.e income received by right of survivorship by the sole surviving male member of a Hindu undivided family can be taxed in the hands of such male member as his own individual income for the purpose of assessment to super-tax under s. 55 of the Indian Income-tax D Act, 1922.": Commissioner of Income-tax v. A. P. Swamy G<>- medalli('). It may however be recalled that in Kalyanji Vithaldas's case(') income assessed to tax belonged separately to four out of six partners : of the remaining two it was from an ancestral source but the fact that each such partner had a wife or daughter did J: not make that income from an ancestral source income of the undivided family of the panner, his wife and daughter. In Gomedalli Lakshminarayan's case(') the propeny from which income accrued belonged to a Hindu undivided family and the effect of the death of the father who was a manager was merely to invest the rights of a manager upon the son. The income from the pro- ¥ perty was and continued to remain the income of the undivided family. This distinction which had a vital bearing on the issue falling to be determined was not given effect to by the Judicial Committee in A. P. Swamy Gomedal/i's case('). A recent judgment of the Judicial Committee in a ca5e arisG ing from Ceylon-Attorney-General of Ceylon v. A. R. Arunachalam Chetiar and Others(') is in point. One Arunachalam -a Nattukottai Chettiar-and his son constituted a joint family governed by the Mitakshara School of Hindu law. The father aad the son were domiciled in India and had trading and other interests in India, Ceylon and Far Eastern Countries [Vide AttorneyH 5 l.T.ll. 367. (3) ! l.T.R. 416. (2) S 1.T.R. 90-L.R. 641.A. 28. (4) L.R. [19$7) A.C. 540 : 341.T.R. Suppl. 42. • - > '· • ., .. BUDDANNA v. C. I. T. (Shah, J.) 233 A General v. A. R. Arunachalam Chettiar (No. 1)-(L.R.[1957] A. C. 513). The undivided son died in 1934 and Arunachalam became the sole surviving coparcener in a Hindu undivided family to which a number of female members belonged. Arunachalam died in 1938 shortly after the Estate Duty Ordinance No. 1 of 1938 came into operation in Ceylon. By s. 73 of the OrdiB nance it was provided that property passing on the death of a member of a Hindu undivided family was exempt from payment of estate duty. At all material times, the female members of the family had the right of maintenance and other rights which belonged to them as such members. The widows in the family including the widow of the predeceased son had also the power c to introduce coparceners in the family by adoption, and that power was exercised after the death of Arunachalam. On a claim to estate duty in respect of Arunachalam's estate in Ceylon, it was held that Arunachalam was at his death a member of a Hindu undivi(oJed family, the same undivided family of which his son, D when alive was a member, and of which the continuity was preserved after Arunachalam's death by adoptions by the widows of the family. The Judicial Committee observed at p. 543 : E F G H " ...... though it may be correct to speak of him (the sole surviving coparcener) as the "owner", yet it is still correct to describe that which he owns as the joint family property. For his ownership is such that upon the adoption of a son it assumes a different quality : it is such too, that femule members of the family (whose members may increase) have a right to maintenance out of it and in some circumstances to a charge for maintenance upon it. And these are incidents which arise, notwithstanding his so-called ownership, just because the property has been and has not ceased to be joint family property . . it would not appear reasonable to impart to the legislature the intention to discriminate, so long as the family itself subsists, between property in the hands of a single coparcener and that in the hands of two or more coparceners." Dealing with the question whether a single coparcener can alienate the property in a manner not open to one of several coparceners, they observed that it was, "an irrelevant consideration. Let it be assumed that his power of alienation is unassailable: that means no more than that he has in the circumstances the power to alienate joint family property. That is what it is 2J4 SUPREME COURT REPORTS [1966] .1 S.C.R. •mtil he alienates it, and, if he does not alienate it, that is what it remains. The fatal flaw in the argument of the appellant appeared to be that, having labelled the ;•1rviving coparcener "owner", he then attributed to his ownership such a congeries of rights that the property could no longer be called "joint family property". 1be family, a body fluctuating in numbers and comprised of male and female members, may equally well be said to be owners of the property, but owners whose ownership is qualified by the powers of the coparceners. There is in fact nothing to be gained by the use of the word "owner" in this connexion. It is only by analysing the nature of the rights of the members of the undivided family, both those in being and those yet to be born, that it can be determined whether the family prope11y can properly be described as "joint property" of the undivided family." Property of a joint family therefore dlles not cease to belong to the family merely because the family is represented by a single coparcener who possesses rights which an owner of property may possess. In the case in hand the property which yielded the income originally belonged to a Hindu undivided family. On the death of Buddappa the family which included a widow and females born in the family was represented by Buddanna alone but the property still conlinucd to belong to that undivided family and income received therefrom was taxable as income of the Hindu undivided family. The Hi!!h Coll"t was therefore right in recording their B c D I. an.,wers referred for opinion. F We may observe that in this case we ellpress no opinion on the question whether a Hindu undivided family may for the purpose of the Indian Income-tax Act be treated as a taxable entity when it consists of a single member-male or female. The appeal is dismissed with costs. Appeal dismissed. G 1 ; ' , '