# J96J r S. Bansal v. Dtlhi Administrolion

- **Citation:** [1964] 2 S.C.R. 480
- **Court:** Supreme Court of India
- **Decided:** 1961-02-28
- **Case number:** Civil Appeals Nos. 352-355 of 1962
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/j96j-r-s-bansal-v-dtlhi-administrolion-2938
- **Pages:** 16

## Headnote

J96J
r.. S. Bansal
v.
Dtlhi Administrolion
1963
March 21
..
480
SUPREME COURT REPORTS [l 91l4] VOL.
he would have otherwise spt'nt in obtaining a succession certificate, and (ii) getting the money belonging
to his father as his heir.
Even otherwise he secured
a non-economic advantage as he got himself relieved
of the trouble of getting the certificate of proof to the
satisfaction of the rationing authority and the Post
:Master General of his credential to receive the
money.
He was, therefore, guilty of making the
false documents both dishonestly and fraudulently.
The High Court is right in coming to the conclusion
which it did.
Jn the result, the appeal fails and is dismissed.
Appeal dismii8ed .
•
PHILIP .JOHN PLASKET THOMAS
r.
COMMISSIONER OF INC0:\1E
TAX CALCUTT A
(S. K.
DAS,
A. K. SARKAR and
:\L HIDAY.ATC:LLAH .JJ.)
Income Tax-Tran..~Jer of share.,. l1!f '' man to a 11Jomau
before marriay1:-l11conie /roni those $lvrre~'i not tu l1e inc.ludetl in
that of her h11•lm111l-11!ea11ing of 1cifc and /11,.l,a11d-h1terpre.
tatim• of •latute-lnlention of &.gislarure-lncli<m lncom e-tax
Act, [.922 (11 of ]!122), 8S. /(j (3) (q) (iii), Jr,(.1) (I,), Jfj (1) (o).
The appellant who was engaged to one Mrs. Knight,
transferred 750 shares to her on December JO, 1947.
On
December Jj, 1947, the Conipany tran~ferrerl those shares in
her name in its book..
On December !fl, 1947, the marriage
was !'o)cmnised.
The Income~tax Officer included the incon1c
of Mrs. Thomas from tho•e •hares in
the income of her
husband.
The appeal of the assessee-husband was dismi,.ed
by the Appellate A!Sistant Commi'9ion.r who lielcl that the
•
..
2 S.C.R.
SUPREME COURT REPORTS
481
prov1S1ons of s. 16 (3) (b) and s. 16 (3) (a) (iii) applied.
Appeals having failed, the Appellate Tribunal referred to the
High
Court
the
question
whether
the provisions of
s. 16 (3) (a) (iii) would apply or those of s. JG (I) (c).
The
view
of
the High
Court
was
that the provisions of
s. 16 (3) (a) (iii) would apply and not of s. 16 (I) (c). The
appellant crune to this Court after obtaining a certihcate of
fitness.
Held that the provisions of s. 16 (3) (a) (iii) did not
apply to the present case. From whatever point of view the
transfer of the shares be con!lidered, whether as a consideration
for a promise to marry or a gift subject to the subsequent condi·
tion of marriage, the transfer took effect immediately and was
not postponed to the date of marriage. On the date of transfer,
the appellant and Mrs. Knight were not husband and wife and
hence there was no transfer, directly and indirectly, by the
husband to his wife. All income of the wife from all assets
is not includible in the income of her husband. The income
from only those assests of the wife can be included in that of
her husband which were transferred to her by her husband after
they became husband and wife.
The statute must be construecl in a manner which carries
out the intention of the legislature. The intentlon of the
legislature must be
primarily gathered from the words of
the statute itself. If the words
are
unambiguous
or
plain, they will indicate the intention with which the statute
was passed and the object to be obtained by it. There is
nothing ins. 16 (3) which indicates that the words •wife' or
'husband' must not be taken in their primary sense which is
clearly indicative of a marital relationship. The words •wife
and husband' should be given their true natural meaning.
They do not include prospective husband and prospective wife.
Bhogilal Laherchand
v.
Oommi.<sioner
of Income.
tax, [1954] 25 I. T. R. 523, Commissioner of Income-tax v.
Sodra Devi (19.57], 32 I. T. R. 615, In Re Smalley, Smalley v.
Scotton, [1929] 2 Ch. 112, Doe v. Hiscocks, (1839) 5 M. &,
W. 369, Lard Vestey's Executors & Vestey v. Oommissio,.er oj
Inland Reveune (1949), 31 T. C. 1 and OommiPSioner of Inland
Revenue v. Gaunt, (1941), 24 T. C. 69, referred to.

## Text

J96J
r.. S. Bansal
v.
Dtlhi Administrolion
1963
March 21
..
480
SUPREME COURT REPORTS [l 91l4] VOL.
he would have otherwise spt'nt in obtaining a succession certificate, and (ii) getting the money belonging
to his father as his heir.
Even otherwise he secured
a non-economic advantage as he got himself relieved
of the trouble of getting the certificate of proof to the
satisfaction of the rationing authority and the Post
:Master General of his credential to receive the
money.
He was, therefore, guilty of making the
false documents both dishonestly and fraudulently.
The High Court is right in coming to the conclusion
which it did.
Jn the result, the appeal fails and is dismissed.
Appeal dismii8ed .
•
PHILIP .JOHN PLASKET THOMAS
r.
COMMISSIONER OF INC0:\1E
TAX CALCUTT A
(S. K.
DAS,
A. K. SARKAR and
:\L HIDAY.ATC:LLAH .JJ.)
Income Tax-Tran..~Jer of share.,. l1!f '' man to a 11Jomau
before marriay1:-l11conie /roni those $lvrre~'i not tu l1e inc.ludetl in
that of her h11•lm111l-11!ea11ing of 1cifc and /11,.l,a11d-h1terpre.
tatim• of •latute-lnlention of &.gislarure-lncli<m lncom e-tax
Act, [.922 (11 of ]!122), 8S. /(j (3) (q) (iii), Jr,(.1) (I,), Jfj (1) (o).
The appellant who was engaged to one Mrs. Knight,
transferred 750 shares to her on December JO, 1947.
On
December Jj, 1947, the Conipany tran~ferrerl those shares in
her name in its book..
On December !fl, 1947, the marriage
was !'o)cmnised.
The Income~tax Officer included the incon1c
of Mrs. Thomas from tho•e •hares in
the income of her
husband.
The appeal of the assessee-husband was dismi,.ed
by the Appellate A!Sistant Commi'9ion.r who lielcl that the
•
..
2 S.C.R.
SUPREME COURT REPORTS
481
prov1S1ons of s. 16 (3) (b) and s. 16 (3) (a) (iii) applied.
Appeals having failed, the Appellate Tribunal referred to the
High
Court
the
question
whether
the provisions of
s. 16 (3) (a) (iii) would apply or those of s. JG (I) (c).
The
view
of
the High
Court
was
that the provisions of
s. 16 (3) (a) (iii) would apply and not of s. 16 (I) (c). The
appellant crune to this Court after obtaining a certihcate of
fitness.
Held that the provisions of s. 16 (3) (a) (iii) did not
apply to the present case. From whatever point of view the
transfer of the shares be con!lidered, whether as a consideration
for a promise to marry or a gift subject to the subsequent condi·
tion of marriage, the transfer took effect immediately and was
not postponed to the date of marriage. On the date of transfer,
the appellant and Mrs. Knight were not husband and wife and
hence there was no transfer, directly and indirectly, by the
husband to his wife. All income of the wife from all assets
is not includible in the income of her husband. The income
from only those assests of the wife can be included in that of
her husband which were transferred to her by her husband after
they became husband and wife.
The statute must be construecl in a manner which carries
out the intention of the legislature. The intentlon of the
legislature must be
primarily gathered from the words of
the statute itself. If the words
are
unambiguous
or
plain, they will indicate the intention with which the statute
was passed and the object to be obtained by it. There is
nothing ins. 16 (3) which indicates that the words •wife' or
'husband' must not be taken in their primary sense which is
clearly indicative of a marital relationship. The words •wife
and husband' should be given their true natural meaning.
They do not include prospective husband and prospective wife.
Bhogilal Laherchand
v.
Oommi.<sioner
of Income.
tax, [1954] 25 I. T. R. 523, Commissioner of Income-tax v.
Sodra Devi (19.57], 32 I. T. R. 615, In Re Smalley, Smalley v.
Scotton, [1929] 2 Ch. 112, Doe v. Hiscocks, (1839) 5 M. &,
W. 369, Lard Vestey's Executors & Vestey v. Oommissio,.er oj
Inland Reveune (1949), 31 T. C. 1 and OommiPSioner of Inland
Revenue v. Gaunt, (1941), 24 T. C. 69, referred to.
CIVIL APPELLATE JURISDICTION: Civil Appeals
Nos. 352-355 of 1962.
Appeals from the judgment and order dated
February 28, 1961, of the Calcutta High Court in
Income Tax Reference No. 49 of 1956.
190!J
Philip Joh• PlAJklt
I'homas
••
CammisJioner of
Iruome·lax, Calcutt•
1963
Philip Jclm PltJJirll
11ront'.J5
v.
CommiJrioner nf
lncom1-ta."<, Ca!C11fla
DaJ J.
482
SUPREME COURT REPORTS (1964)VOL.
Sachin Chaudhu.ry,
D. X.
B. N. Ghosh, for the appellant.
ilfokh.c~jee and
/{. N. Rajagop11la Sastri and R . • I\'. Sachthey,
for the rcspo11<lent.
HJG3.
March 22.
The Judgment of
the
Court was delivered by
S. K. DAS J.·-These are
four appeals on
certificates granted by the High Court of Calcutta
under s. 66·A (2) of the Indian lncome·tax Act,
HJ22.
The appeals are
from the decision of the
Hight Court dated February 28, 1961 in Income·
tax Reference No. 49 of I !l56.
\\' e may first state the relevant facts.
One
P. J. P. Thomas is the appellant before us.
He was
the assessec before the taxing authorities.
He held
7.50 'A' shares in J. Thnmas & Co., Ltd., of 8
.l\·1ission Row, Calcutta.
The assessee entered into
an engagement to marry one ::\frs. Judith Knight,
stated to be a divorcee, and the engagement was
announced in certain newspapers on September 3,
I !l4 7.
On Decem her IO, 194 7 the assessee and Mrs.
Knight presented to the Company an application
to transfer the said 700 'A' sliares to Mrs. Judith
Knight.
A transfer deed of that date stated :
"I, Philip John Plasket Thomas of 8, Mission
Row, Calcutta,
in
consideration
of my
forthcoming marriage with
.Judith Knight
of 35, Ridgeway, Kingsbury, London (herein·
after called the said transferee) do hereby
transfer to the said transferee
the 750 'A·
shares numbered l · 750 standing in my name
in the hooks of .J. Thomas & Co., Ltd., to
hold to the said transferee ........................ .
Executors, administrators and assigns, subject
to the several conditions on which I hold the
same at the time of the execution thereof.
And I, the said transferee, do hereby agree to
2 S.C.R.
SUPREME COURT REPORTS
483
take the
said shares subject to the same
conditions."
On December 15, 1947 the Company transferred
the shares to Mrs. Judith Knight and registered her
as the owner of the shares. On December 18, 1947
the marriage was solemnised. On January 26, 1948
the fact of marriage was communicated to the
Company and the name of the shareholder was
chauged in the books of the company to Mrs.
Judith Thomas. It is undisputed that during the
rdevant periods the shares stood registered in the
name of the assessee's wife and when the income in
question arose to her she was the wife of the assessee.
The four accounting years with which the assessments
were concerned were those ending respectively on
April 30, 1948, April 30, 1949, April 30, 1950 and
April 30, 195 l. The four assessment years were
1949-1950, 1950-1951, 1951-1952 and 1952-1953. It
appears that for the years 1949-1950 and 1950-1951
assessments of PJ. P. Thomas which had by then been
already completed were reopened under s. 34 of the
Indian Income-tax Act, 1922 and the dividends of
Rs. 97,091/- and Rs. 78,272/- as grossed up and
paid to Mrs.Judith Thomas during the accounting
years ending April 30, 1948 and April 30, 1949
were re-assessed in the hands of P. J. P. Thomas.
For the assessment years 1951·1952 and 1952-1953,
the dividends paid by the company to Mrs. Judith
Thomas during
the accounting periods
ending
April 30, 1950 and April 30, 1951 were held by the
I ncome·tax Officer to be includible in the total
income of P. J. P. Thomas under s. 16 (3) (b) of
the Act and accordingly orders were passed including the sums of . Rs. 1,00,000/· and Rs. 16,385/-
being the grossed up dividends for the two years
respectively in the total income of P.J. P. Thomas.
Against the said assessment orders the assessee
preferred appeals to the Appellate Assistant Commissioner. By a common order dated May 11, l!J55
·/963
Philip John PllU"-t
Thomas
v.
Commissioner of
Income-tax, r.aiculta
Dat J.
1963
Philip John Ploslur
Thom'lS
v.
CtmtmissiOfltr of
Ineomt·t 1x, Catrotta
J)as J.
•
484 SUPREME (£0URT REPORTS [1964) VOL.
the
Appellate
Assistant
Commissioner
confirmed the orders of the Income-tax Officer holding
that not only the provisions of s. 16 (3) (b) but also
the provisions of s. 16 (3) (a) (iii) of the Act applied
in these cases.
Against the order of the Appellate Assistant Commissioner th" assessee preferred
four appeals to the Appellate Tribunal and con·
tended (1) that he transferred the shares to Mrs.
Judith Knight when she was not his wife, (2) that
the transfer of shares was absolute at the time when
it was made and no condition was attached to the
transfer, and (3) that the transfer was for adequate
consideration. On these grounds the assessee con·
tended that the piovisions of s. 16 (3) of the Act
were not attracted to the cases in question. The
Appellate Tribunal by a consolidated order dated
April 4, 1956 disagreed with the view of the Income·
tax Officer and the Appellate Assistant Commissioner
that the provisious of s. 16 (3) (b) applied, but it held
that the cases fell within s. 16 (3) (a) (iii) of the
Act, because the transfer became effective only after
the marriage. It further held that the transfer could
also be construed as a revokable transfer within
the meaning of s. 16 (1) (c) of the Act. Therefore
the Appellate Tribunal dismissed the four appeals.
The asscssee then made four applications for
referring two questions of law arising out of the
Tribunal's order to the J:ligh Court. These questions
were:
1.
In the fac:s and circumstances of these
cases, whe1her the dividends paid by J.
Thomas & Co. Ltd.,
to
Mrs. Judith
Thomas, grossed
up to the sums of
Rs. !17,091 I·, Rs. 78,272/ -, Rs. 1,00,000/·
and Rs. IU,385/- respectively for the four
years in question could be included in
the income of Mr. P.J.P. Thomas and be
taxed in his hands under the provision" of
2 S.C.R.
SUPREME COURT REPORTS 485
11ection 16 (3) (a) (iii) of the
Indian
I963
Income-tax Act?
Philip John P/o,,\et
2.
In the facts and circumstances of these
cases, whether
the dividends referred
to above
could be
included in the
total income of Mr. P. ]. P. Thomas
under the provisions of sec. 16 (1) (c) of
the Indian Income-tax Act ?
The Tribunal accepted these applications and
referred the aforesaid two questions to the High
Court. By it, decision dated February 28, 1961 the
High Court answered the first question against the
assessee and the second question in his favour.
The assessec then moved the High Court for a certificate of fitness under s. 66-A (2) of the Act and
having obtained such certificate has perferred the
present appeals to this court. The appeals relate
only to the correctness or otherwise of the answer
given by the High Court to the first question.
As
the Department has filed no appeal as to the
answer givrn by the High Court to the second question, it is unnecessary for us to consider the correct·
ness or otherwise of that answer.
The answer to the first question depends on
the determination of two points: (1) what on its pro·
per interpretation is the true scope and effect of
s. 16 (3) (a) (iii) of the Act, and (2) whether the
transfer made by the assessee in favour of Mrs.
Knight took effect only from the date of the marriage
between the assessee and Mrs. Knight. A third
point as to adequate consideration for the transfer
was also gone into by the High Court, but in the
view which we have taken of the first two points
involved in the question it is unnecessary to decide the
point of adequate consideration.
Before we proceed to a consideration of the
question, it is necessary to set out the relevant
Thomas
v.
Commissiorttr of
lncome-tai.:, Calcutta
Das J.
1963
PhiJit lllm Plosk.t
Tir•"'4J
••
Commi.ui~tr nf
ln:41'11-la, c.Jctdto
Dos J.
486
SUPREME COURT REPORTS [1964] VOL.
provisions of law.
reads:
Section 16 so far as it is relevant
"HJ. Exemptions and cxclitsions in determining the total income-
( l) xx
(2)
xx
xx
xx
xx
xx
(3)
In computing the total income of
any individual for the purpose of assessment,
there shall be included-
'a) so much of the income of a wife
or minor child of such individual
as arises directly or indirectly-
(i)
from the membership of the
wife in a firm of which her
husband is a partner;
(ii)
from
the admission of the
minor to the benefits of
partnership in a firm of which
such individi:al is a partner ;
(iii)
from assets transferred directly or indirectly to the wife
bv the husband otherwise
than for adequate considera-
- tion or in connection with
an agreement to Ii ve apart; or
(iv)
from
assets
transferred
(b) xx
directly or indirectly to the
minor child, not
being a
married daughter, by such
individual (otherwise than
for adequate consideration);
xx
xx
xx
xx".
2 S.C.R.
SUPREME COURT REPORTS
487
Sub-s. (3) of s. 16 of the Act was introduced
in 1937.
For the purpose of its application it is
immaterial whether the partnership was formed
before or after 1937 and whether the transfer was
effected before or after that date.
However, the
sub-section deals only with income arising after its
introduction. It clearly aims at foiling an individual's
attempt to avoid or reduce the incidence of tax by
transfering his assets to his wife or minor child, or
admitting his wife as a partner or admitting his minor
child to the benefits of partnership, in a firm in
which such individual is a partner. It creates an artificial income and must be strictly construed [see Bhogilal Laherchand v. Commissioner of Income-tax (')].
Clauses (a) (i) and (a) (ii) of the sub-section provide
that in computing the total income of an individual
there should be included the income arising directly
or indirectly to his wife from her share as a partner
or to his minor child from the admission to the benefits
of partnership, in a firm of which such individual is
a partner. We are not directly concerned with els.
(a) (i) and (a) (ii). We are concerned with cl. (a)
(iii). Under that clause the income arising from
assets transferred by an individual to his wife has to
be included in the transferor's total income.
There
are two exceptions to this rule, viz., (I) where the
transfer is for adequate consideration, or (2) where it
is in connection with an agreement to live apart.
The second exception has no bearing on the cases
before us.
The first and principal point which has been
urged before us on behalf of the appellant is this.
It is pointed out that at the time the transfer of
shares was made by the a:!sessee to Mrs. Judith
Knight the latter was not the wife of the former and
therefore cl. (a) (iii) which talks of"assets transferred
directly or indirectly to the wife by the husband"
has no application, apart altogether from any question of adequate consideration. This argument on
(I) [1954) 25 I.T,R. 523.
1963
Philip Johrt Plasket
1 homar
v.
Commissioner of
ln&ome·tax, Calcutta
Das J.
1963
Philip l•hn Plask<t
T,,,,,..,
Y.
Cctnmissiontr of
lncome~t•x. Cdcutt•
4b8
SUPREME COURT REPORTS [1964] VOL.
behalf of the appellant was advanced before the High
Court also. The High Court sought to meet it in
the following way. Mukharji J. who gave the
leading judgment said that in order to determine
whether a particular case came under cl. (a) (iii) or
not, the relevant point of time was the time of computation of the total income of the individual for the
purpose of assessment and the section did not limit
any particular time as to when the transfer of assets
should take place.
He then observed:
"It appears to me that as the addition of the
wife's income to the husband's income under
this sub.section is made, the relevant time of
the relationship between
husband and wife
which has to be considered by the taxing
authorities is the time of computing of the total
income of the individual for the purpose of
asses~ment. That is how I read the opening
words of section 16 (3) of the Act : 'In
computing the total income of any individual
for the purpose of assessment'."
Bose J. expressed a slightly different view.
He
said that the material consideration under s. HI
(3) (a) (iii) was whether the transferee was actually
the wife of the assessee during the relevant accounting
period when the income from the assets transferred
tu her accrued. In effect both thr. learned Judges
held that for the application of cl. (a) (iii) it was not
necessary that the relationship of husband and wife
must subsist at the time when the transfer of the
assets is made; according to Mukharji J. the crucial
date to determine the relationship is the date when
the taxing authorities are computing the total income
of the husband and according to Bose J. the crucial
time is the time when the income accrues to the wife.
It must also be stated in fairness to Mukharji J.
that he did not accept the view that the words
'husband' and 'wife' in cl. (a) (iii) included prospective husband and prospective wife.
He accepted the
·-
•
2 S.C.R.
SUPREME COURT REPORTS
489
view that the words 'husband' and 'wife' must mean
legal husband and legal wife. Even so he expressed
the view that on a true construction of s. 16 (3) (a)
(iii) the time when the relationship has to be construed
is the time when the computation of the total income
of the husband is made.
Learned counsel for the appellant has vecy
strongly contended before us that the view expressed
by the learned Judges of the High Court as to the
proper interpretation of cl. (a) (iii) is not correct.
On a plain reading of sub-s. (3) of s. 16 it seems
clear to us that at the time when the income accrues, it
must be the income of the wife of that individual
whose total income is to be computed for the purpose
of assessment: this seems to follow clearly from cl.
(a) of sub·s. (3).
Therefore, in a sense it is right to
say that the relationship of husband and wife must
subsist at the time of the accrual of the income :
otherwise the income will not be the income of the
wife,
for the word 'wife' predicates a marital
relationship. The matter does not however end
there. When we go to sub:cl. (iii) we find that only
so much of the income of the wife as arises directly
or indirectly from assets transferred directly or indirectly to the wife by the husband shall be included
in the total income of the husband.
Therefore, subcl. (iii) predicates a further condition, the condition
being that the income must be from such assets as
have been transferred directly or indirectly to the
wife by the husband. This condition must be fulfilled before sub-cl. (iii) is attracted to a case. It is
clear that all income of the wife from all her assets
is not includible in the income of the husband.
Thus on a proper reading of s. 16 (3) (al (iii) it seems
clear enough that the relationship of husband and
wife must also subsist when the transfer of assets is
made in order to fulfil the condition that the transfer
is "directly or indirectly to the wife by the husband",
1963
Phili.b John Plaskd
Thom11S
v.
Commissi011er 1
IncJT111·tax, Calcutta
Das lo
1963
Philip Jolrn Plos/ut
T"""4s
Y,
Commissionn ef
/nc01Jtt·t&:1e Catcuita
Du J.
490
.SUPREME COURT REPORTS [1964] VOL.
Learned counsel for the respondent has contended before us that the transfer mentioned in s. 16
(3) {a) (iii) need not necessarily be post-nuptial and
he has argued that the main object of the provision
is the principle of aggregation, that is, the inclusion
of the income of the wife m the income of the husband, because of the influence which the husband
exercises over the wife.
He has also pointed out
that sub-cl. (i) which refers to the membership of the
wife in a firm of which her husband is a partner is
indicative of the object of the provision because it
does not talk of any assets being brought into the
firm by the wife.
He has further argued that in
sub-cl. (iii) the word 'wife' is merely descriptive and
means
the woman referred to in cl. (a), and the
word 'husband' has reference merely to the individual
whose total income is to be computed for the purpose
of assessment. In support of this argument he has
relied on the expression "such individual" occurring
in sub-s. (3) (a). We are unable to accept these
arguments as correct. It is indeed true that all the
four sub-clauses of cl. {a) must be harmoniously read
as this court observed in Commissioner of Income-tax
v. Sodra Devi (1); but we see no disharmony between
sub-cl. (i) and sub-cl. (iii) on the interpretation which
we are putting. Sub-cl. (i) talks only of the membership of the wife in a firm of which her husband
is a fartner ; it has no reference to assets at all.
Sub-c . (iii) however talks of assests and qualifies the
word "assets" by the adjectival clause "transferred
directly or indirectly to the wife by the husband".
We fail to sec how any disharmony results from
giving full effect to the adjectival clause in sub-cL
(iii). Nor do we see why the words 'husband' and
'wife' should be taken in the archaic sense contmded
for by the learned counsel for the respon-dent.
In
re Smalley, Sm,alley v. Scotton ('),
a decision on
which learned counsel for the respondent relies, the
facts were these.
A testator by his will gave all his
property to "my wife E.A.S". The testator left a
(I) [1957) 32 I.T.R. 615, 625,
(2) [1979) 2 Ch, 112.
-
•
-
-
2 S.C.R.
SUPRE!\1E COURT REPORTS
491
lawful wife M.A.S. and children by her and contributed to their support, but about five years before his
death had contracted a bigamous marriage with a
widow E.A. M .. who lived with him and was known
as E.A.S., and believed she was and was reputed to
be his. wife.
The will was produced by E.A.M.
It was held that the will taken in connection with
the surrouding circumstances, indicated that the
testator intended to benefit E.A M., she being in a
s~condary sense and by repute his wife.
The rules
of construction which were followed in that case were
those laid down by Lord Abinger in Doe v. Hisooolcs (1).
Lord Abinger said :
"The object in all cases is to discover the intention of the testator. The first and most obvious
mode of doing this is to read his will as he has
written it, and collect his intention from his
words. But as his words refer to facts and
circumstances respecting his property and his
family, and others whom he names or describes
in his will, it is evident that the meaning and
application of his words cannot be ascertained,
without evidence of all those facts and circumstances. To understand the meaning of any
writer,
we
must first be appraised of the
persons
and circumstances that are
the
subjects of his allusions or statements : x x x
All the facts and circumstances, therefore,
respecting persions or property, to
which
the will relates, are undoubtedly legitimate,
and often necessary evidence, to enable us to
understand the meaning and application of
his words."
We are dealing here with a statute and the statute
must be construed in a' manner which carries out the
intention of the legislature. The in tendon of the
legislature must be gathered from the words of the
statute itself. If the words are unambiguous or plain,
(I) (1839) 5 M. & W. ~61, 367.
1963
Philip John Plosket
Thomas
v.
Commissioner of
lncome·tax, Calcutta
Du J.
1963
f'liiJip John Plad:tl
Thomas
v.
~mmiSJiontr of
lneom~·ta.t ,Calci;tta
Das J.
492
SUPREME COURT REPORTS [I !164) VOL.
they will indicate the intention with which the statute
was passed and the object to be obtained by it. There
is nothing in sub-s. (3) of s. 16 which would indicate
that the word 'wife' or the word 'husband' must not
be taken in their primary sense which i3 clearly
indicatve of a marital relationship. !\or arc we
satisfied that the object of the legislature is just the
principle of aggregation. We have said earlier that
sub-s. (3) of s. Hi clearly aims at foiling an individual's attempt to avoid or reduce the incidence of
tax by transferring his assets to the wife or minor
child or admitting his wife as a partner or admitting
his minor child to the benefits of partnership, in a
firm in which such individual is a partner. This
object does not require that the word 'wife' or the
word 'husband' should be interpreted in an archaic
or secondary sense.
Learned counsel for the respondent has drawn
our attention to certain English decisions, particularly the decision of the House of Lords in Lord
Vestey's Bxecutors und Vestey v.
Commissim~rs of
Inland Revenue ('). One of the questions which was
considered in that decision was whether for the
purpose of either s. 18 of the Fi'lance Art, J 936 (in
England} ors. 38 of the Finance Act, 1938 (in England) "wife" included a "widow." Their Lordships
had to consider the earlier decision of the Court of
Appeal in Commissioners of Inland
Revenue v.
Gaunt ('), which held that the one word included the
other.
Their Lordships ultimately held, over-ruling
tne decision in
Gaunt' s case ('), that the word
"wife" did not include a "widow." The English
decisions proceeded on the footing that in England
it is a principle of Income Tax law, embodied in
rule 16 of the General Rules, that for Income Tax
.iurposes husband and wife living together arc one.
tol"J Morton said :
"I think that the treatment of husband and
wife by the Legislature
for
Income Tax
(I) (1949) SI T. C. I
(2) (19fl) 2+ T.C. 69.
-
2 S.C.R.
SUPREME COURT REPORTS
493
purposes rests on the view that any income
enjoyed by one spouse is a benefit to the other
spouse. It is not surprising, therefore, that in
the Sections now under consideration a benefit
to the wife of the settlor is treated as being a
benefit to the settlor, but it seems to me un·
likely that this principle is being extended by
these Sections to the widow of the settlor."
Now, it is quite clear to us that the treatment of
husband and wife in the Indian Income-tax Act, 1922
does not rest on the view that any income enjoyed
by one spou~e is a benefit to the other spouse ; for
sub-s. (3) of s. 16 makes it quite clear that all income
enjoyed by the wife is not to be included in the income
of the husband and only such of the wife's income as
comes within the sub-section is to be included in the
income of the husband. We therefore think that the
English decisions are not in point and there are no
reasons why the word 'wife' or the word 'husband'
should not be given its true natural meaning.
This brings us to the second question, namely,
whether the transfer of shares made by the assessee
in favour of Mrs. Judith Knight on December 10,
194 7 was to take effect only from the date of their
marriage. It is admitted that on December 10, 1947
the assessee and Mrs. Knight were not married. It
is also admitted that they were engaged to be married
and the engagement was announced on September 3,
194 7.
The transfer deed which we have earlier
quoted contained no words of postponement. On
the contrary, it contained words which indicated that
the transfer took
effect immediately. Learned
counsel for the respondent has rightly pointed out
that the expression in the transfer deed "in consideration of my
forthcomin~ marriage" can have very
little meaning as a real consideration, because on
September 3, 1947 the parties had mutually promised
to marry each other; therefore the promise to marry
/963
Philip lnhn Pl:Jsket
Thomas
'
c,,mmi5tio11n ·if
Jn.:omt·la."<, Calc•1tto
Das J,
1963
Philip Johri Pla1ktl
llwmas
v.
CimmiJSio111r of
fnrum1-tJx, Cairutfa
Dns }.
494
SUPREME COURT REPORTS (1964) VOL.
had been made earlier th•m December 10, 1947.
Learned counsel for the respondent has arg,1ed before
us that the transfer of shares was really a gift made
to Mrs. Knight in contemplation of the forthcoming
marriage and the gift was subject to a condition
subsequent, namely, that of marriage which if not
performed would put an end to the gift.
This does
not however advance the case of the respondent in
any way.
A gift may be made subject to conditions,
either precedrnt or subsequent.
A condition precedent is one to be performed before the gift takes
eff~ct; a condition subsequent is one to be performed
after the gift had taken effect, and if the condition is
unfulfilled that will put an end to the gift. But if the
gift had already taken effect on December 10, 194 7
and lhe condition subsequent has been later fulfilled,
then the gift is effective as from December IO. 1947
when the asscssee and Mrs. Knight were not husband
and wife.
That being the position. sub·cl. (iii) of
s. 16 (:3) (a) will not be attracted to the case as the
transfer of the shares was not made by the husband
to his wife.
We were also addressed on th<: qul"stion as to
the circumstances in which a gifr to an intended
wife or husband may be recovered whe11 the marriage
does not take place through the fault or either of
the two parties.
We do not think that that question
falls for decision in the present case.
From what·
ever point of view we look at the transfer of shares in
the present case, whether it be in consideration of a
promise to marry or be a gift subject to 1bc subse·
quent condition of marriage, the transfer takes
effect immediately and is not postponed to the date
of marrigc. If that be the true position, as we hold
it to be, then sub-cl. (iii) of s. lt.i (3) (a) is not
attracted to these cases, apart altogether from any
question as to whether there was adequate consideration for the transfer
within the meaning of that
sub-clause.
•
2 S.C.R.
SUPREME COURT REPORTS
495
For the reasons given above we allow the
appeals and answer the question referred to the Hi!)h
Court in favour of the assessee.
The appellant will
be entitled to his costs in this court as also in the
High Court ; there will be one hearing fee.
Appeals allowed.
MRS. CHANDNEE WIDYA VATI MADDEN
v.
DR. C. L. KATIAL & OTHERS
(B. P. SINHA, C. J., J.C. SHAH and
N. RAJAGOPALA AYYANGAR JJ.)
Specific performance'-Contract to sell house propertyImplied t•rm-Poi11ts not raised in the High Court, if be allowed
for the first time in this Court.
The plaintiffs-respondents entered into a contract of sale
in respect of a house property belonging to the appellant. The
deed of agreeuient provided that the vendor shall obtain the
pt"rmh.sion of the Chief Commissioner to the transaction of
sale within two months of the agreement and if the sairl
permission was not forthcoming within that time, it was open
to the purchasers to extend the date or to treat the agreement
as canceJlcd.
As the necessary permission was not forthcoming ~.vithin the stipulated time, the purchasers extended the
time by another month. The appellant withdrew her application for the necessary
permission. The defendant having
failed to perform
her part of the contrart, the plaintiffs
brought a suit for specific performance of the contract for sale or
in the alt<rnative for damages.
The trial court, althoug-h it
found that the plaintiffs had been throughout ready ani willing,
inderd anxiou-., to perform their part of the contract and that
it was the defendant who had backed out of it, refused the main
relief of specific performance of the contract on the ground that
the agreement was inchoate, as the previous sanction of the
Chief Com1nissioner to the proposed transfer had not been
obtained. The High Court came to the conclusion that there
1963
Pfii/ip lnlm Fla!kei
Thomas
v.
Commiuionf!r of
Income-tax, Ca'c111ta
Das J.
1961
A1.arch 25