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Thursday, August 15, 2013

Hindu Succession Act, 1956-ss. 4, 8 and 19-Property of father who dies intestate-Whether devolves on son, who separated by partition from his father, in individual capacity or Karta of his HUF. Wealth Tax Act, 1957-ss. 3 and 4-Property inherited under s 8 Hindu Succession Act, 1956-Whether HUF or individual property. Income Tax Act, 1961/Income Tax Act, 1922-Income from as sets inherited by son from father-Whether assessable as individual income. HEADNOTE: Rangi Lal and his son Chander Sen constituted a Hindu undivided family. They had some immovable property and the family business. By a partial partition the HUF business was divided between the two and thereafter it was carried on by a partnership consisting of the two. The house property of the family continued to remain joint. The firm was assessed to income-tax as a registered firm and the two partners were separately assessed in respect of their share of income. The mother and wife of Rangi Lal having pre-deceased him, when he died he left behind him his only son Chander Sen and his grandsons. On his death there was a credit balance of Rs.1,85,043 in his account in the books of the firm. In the wealth tax assessment for the assessment year 1966-67, Chander Sen, who constituted a joint family with his own sons, filed a return of his net-wealth by including the property of the family which u on the death of Rangi Lal passed on to him by survivorship and, also the assets of the business which devolved upon him on the death of his father. The sum of R.S.. l ,85,0 13 standing to the credit of Rangi Lal was, however, not included in the net-wealth of the assessee-family. Similarly, in the wealth tax assessment for the assessment year 1967-68 a sum of Rs.1,82,742 was not included, in the net wealth of the assessee family. It was contended that these amounts devolved on Chander Sen 255 in his individual capacity and were not the property of the assessee family. The Wealth-tax officer did not accept this contention and held that these sums also belonged to the assessee-family. A sum of Rs.23,330 was also credited to the account of late Rangi Lal on account of interest accruing on his credit balance. In the proceedings under the Income Tax Act for the assessment year 1367-68 this sum was claimed as deduction on the same ground. The Income-tax officer disallowed the claim on the ground that it was a payment made by Chander Sen to himself. On appeal, the Appellate Assistant Commissioner of Income-tax accepted the assessee's claim in full and held that the capital in the name of Rangi Lal devolved on Chander Sen in his individual capacity and as such was not to be included in the wealth of the assessee family. The sum of Rs.23,330 on account of interest was also directed to be allowed as deduction. The Income-tax Appellate Tribunal dismissed the appeals filed by the Revenue and its orders were affirmed by the High Court. On the question: "Whether the income or asset which a son inherits from his father when separated by partition should be assessed as income of the Hindu Undivided Family consisting of his own branch including his sons or his individual income", dismissing the appeals and Special Leave Petition of the Revenue, the Court, ^ HELD: 1. The sums standing to the credit of Rangi Lal belong to Chander Sen in his individual capacity and not the Joint Hindu Family. The interest of Rs.23,330 was an allowable deduction in respect of the income of the family from the business. [268C-D] 2.1 Under s. 8 of the Hindu Succession Act, 1956, the property of the father who dies intestate devolves on his son in his individual capacity and not as Karta of his own family. Section 8 lays down the scheme of succession to the property of a Hindu dying intestate. The Schedule classified the heirs on whom such property should devolve. Those specified in class I took simultaneously to the exclusion of all other heirs. A son's son was not mentioned as an heir under class I of the Schedule, and, therefore, he could not get any right in the property of his grandfather under the provision. [265F-G] 256 2.2 The right of a son's son in his grandfather's property during the lifetime of his father which existed under the Hindu law as in force before the Act, was not saved expressly by the Act, and therefore, the earlier interpretation of Hindu law giving a right by birth in such property "ceased to have effect". So construed, s. 8 of the Act should be taken as a self-contained provision laying down the scheme of devolution of the property of a Hindu dying intestate. Therefore, the property which devolved on a Hindu on the death of his father intestate after the coming into force of the Hindu Succession Act, 1356, did not constitute HUF property consisting of his own branch including his sons. [265G-H; 266A-C] 2.3 The Preamble to the Act states that it was an Act to amend and codify the law relating to intestate succession among Hindus. Therefore, it is not possible when the Schedule indicates heirs in class I and only includes son and does not include son's son but does include son of a predeceased-son, to say that when son inherits the property in the situation contemplated by s. 8, he takes it as Karta of his own undivided family. [267C-D] 2.4 The Act makes it clear by s. 4 that one should look to the Act in case of doubt and not to the pre-existing Hindu law. It would be difficult to hold today that the property which devolved on a Hindu under s. X of the Act would be HUF in his hand vis-a-vis his own son; that would amount to creating two classes among the heirs mentioned in class I, the male heirs in whose hands it will be joint Hindu family property and vis-a-vis sons and female heirs with respect to whom no such concept could be applied or contemplated. [267E-G] 2.5 Under the Hindu law, the property of a male Hindu devolved on his death on his sons and the grandsons as the grandsons also have an interest in the property. However, by reason of s. 8 of the Act, the son's son gets excluded and the son alone inherits the properly to the exclusion of his son. As the effect of s. 8 was directly derogatory of the law established according to Hindu law, the statutory provisions must prevail in view of the unequivocal intention in the statute itself, expressed in s. 4(1) which says that to the extent to which provisions have been made in the Act, those provisions shall override the established provisions in the texts of Hindu Law. [264G-H; 265A-B] 2.6 The intention to depart from the pre-existing Hindu law was again made clear by s. 19 of the Hindu Succession Act which stated that 257 if two or more heirs succeed together to the property of an intestate, they should take the property as tenants-in- common and not as joint tenants and according to the Hindu law as obtained prior to Hindu Succession Act two or more sons succeeding to their father's property took a joint tenants and not tenants-in-common. The Act, however, has chosen to provide expressly that they should take as tenants-in-common. Accordingly the property which devolved upon heirs mentioned in class I of the Schedule under s. 8 constituted the absolute properties and his sons have no right by birth in such properties. [266F-H] Commissioner of Income-tax, U. P. v. Ram Rakshpal, Ashok Kumar, 67 I.T.R. 164; Additional Commissioner of Income-tax, Madras v. P.L. Karuppan Chettiar, 114 I.T.R. 523; Shrivallabhdas Modani v. Commissioner of Income-Tax, M.P-I., 138 I.T.R. 673 and Commissioner of Wealth-Tax A.P. II v. Mukundgirji 144 I.T.R. 18, approved. Commissioner of Income-tax, Gujarat-l v. Dr. Babubhai Mansukhbai (Deceased), 108 I.T.R. 417, overruled.

published in http://judis.nic.in/supremecourt/imgst.aspx?filename=8997
PETITIONER:
COMMISSIONER OF WEALTH TAX. KANPUR ETC. ETC.

Vs.

RESPONDENT:
CHANDER SEN ETC.

DATE OF JUDGMENT16/07/1986

BENCH:
MUKHARJI, SABYASACHI (J)
BENCH:
MUKHARJI, SABYASACHI (J)
PATHAK, R.S.

CITATION:
 1986 AIR 1753  1986 SCR  (3) 254
 1986 SCC  (3) 567  1986 SCALE  (2)75
 CITATOR INFO :
 F    1987 SC 558 (10)
 RF    1991 SC1654 (27)


ACT:
     Hindu Succession  Act, 1956-ss. 4, 8 and 19-Property of
father who  dies  intestate-Whether  devolves  on  son, who
separated  by  partition  from his  father,  in  individual
capacity or Karta of his HUF.
     Wealth Tax Act, 1957-ss. 3 and  4-Property  inherited
under  s   8  Hindu  Succession Act,  1956-Whether  HUF  or
individual property.
     Income Tax Act, 1961/Income  Tax Act, 1922-Income from
as sets inherited by  son from father-Whether assessable as
individual income.



HEADNOTE:
     Rangi Lal and his son Chander Sen constituted a Hindu
undivided family.  They had  some immovable property and the
family business. By a partial partition the HUF business was
divided between the two and thereafter it was carried on by
a partnership  consisting of  the two. The house property of
the family  continued to remain joint. The firm was assessed
to income-tax as a registered firm and the two partners were
separately assessed in respect of their share of income. The
mother and  wife of  Rangi Lal having pre-deceased him, when
he died he left behind him his only son Chander Sen and his
grandsons. On  his death  there was  a credit balance  of
Rs.1,85,043 in his account in the books of the firm.
     In the  wealth tax assessment for the assessment year
1966-67, Chander  Sen, who  constituted a  joint family with
his own sons, filed a return of his net-wealth by including
the property of the family which u on the death of Rangi Lal
passed on to him by survivorship and, also the assets of the
business which devolved upon him on the death of his father.
The sum of R.S.. l ,85,0 13 standing to the credit of Rangi
Lal was,  however, not included in  the net-wealth  of the
assessee-family. Similarly, in the wealth tax assessment for
the assessment year 1967-68  a sum  of Rs.1,82,742  was not
included, in  the net  wealth of the assessee family. It was
contended that these amounts devolved on Chander Sen
255
in his individual capacity and were not the property of the
assessee family.  The Wealth-tax officer did not accept this
contention and held that  these sums  also belonged  to the
assessee-family.
     A sum  of Rs.23,330 was also credited to the account of
late Rangi Lal on account of interest accruing on his credit
balance. In the proceedings under the Income Tax Act for the
assessment year 1367-68 this sum was claimed as deduction on
the same ground. The Income-tax officer disallowed the claim
on the ground that  it was a payment made by Chander Sen to
himself.
     On appeal, the  Appellate Assistant  Commissioner  of
Income-tax accepted  the assessee's  claim in  full and held
that the  capital in  the name of  Rangi  Lal devolved  on
Chander Sen  in his  individual capacity and as such was not
to be included in the wealth of the assessee family. The sum
of Rs.23,330  on account of interest was also directed to be
allowed as deduction.
     The Income-tax Appellate Tribunal dismissed the appeals
filed by  the Revenue  and its orders were  affirmed by the
High Court.
     On the  question: "Whether the income or asset which a
son inherits  from his father when  separated by  partition
should be  assessed as income of the Hindu Undivided Family
consisting of  his own branch including  his  sons  or his
individual income", dismissing the appeals and Special Leave
Petition of the Revenue, the Court,
^
     HELD: 1.  The sums standing to the credit of Rangi Lal
belong to Chander Sen in his individual capacity and not the
Joint Hindu Family. The interest   of Rs.23,330   was  an
allowable deduction  in respect of the income of the family
from the business. [268C-D]
     2.1 Under s. 8  of the Hindu Succession Act, 1956, the
property of  the father who dies  intestate devolves on his
son in his individual capacity and not as Karta of his own
family. Section 8 lays down the scheme of succession to the
property of a Hindu dying intestate. The Schedule classified
the heirs  on  whom  such  property  should  devolve.  Those
specified in class I took simultaneously to the exclusion of
all other  heirs. A  son's son was not mentioned as an heir
under class  I of the Schedule, and, therefore, he could not
get any right in  the property of his grandfather under the
provision. [265F-G]
256
     2.2 The  right of a son's son  in  his  grandfather's
property during the lifetime  of his  father which  existed
under the  Hindu law  as in  force before  the Act,  was not
saved expressly by the Act,  and  therefore, the  earlier
interpretation of  Hindu law giving a right by birth in such
property "ceased  to have effect". So construed, s. 8 of the
Act should  be taken  as a  self-contained provision  laying
down the  scheme of  devolution of  the property  of a Hindu
dying intestate. Therefore, the property which devolved on a
Hindu on  the death of his father intestate after the coming
into force  of the  Hindu  Succession  Act,  1356,  did not
constitute  HUF  property  consisting of  his own  branch
including his sons. [265G-H; 266A-C]
     2.3 The  Preamble to  the Act states that it was an Act
to amend and codify the law relating to intestate succession
among  Hindus. Therefore,  it is  not possible  when the
Schedule indicates  heirs in  class I  and only includes son
and does  not include  son's son  but does  include son of a
predeceased-son, to  say that when son inherits the property
in the situation contemplated by s. 8, he takes it as Karta
of his own undivided family. [267C-D]
     2.4 The Act makes it clear by s. 4 that one should look
to the Act in case of doubt and  not to  the pre-existing
Hindu law.  It would  be difficult  to hold  today that the
property which devolved on  a Hindu  under s. X of the Act
would be  HUF in  his hand vis-a-vis his own son; that would
amount to  creating two classes among the heirs mentioned in
class I,  the male  heirs in  whose hands  it will  be joint
Hindu family  property and  vis-a-vis sons  and female heirs
with respect  to whom  no such concept could  be applied or
contemplated. [267E-G]
     2.5 Under the Hindu  law, the property of a male Hindu
devolved on  his death on his sons and the grandsons as the
grandsons also have an interest in the property. However, by
reason of  s. 8 of the Act, the son's son gets excluded and
the son alone inherits the properly to the exclusion of his
son. As the effect  of s.  8 was directly derogatory of the
law  established  according  to Hindu law,  the  statutory
provisions must prevail in view of the unequivocal intention
in the statute itself, expressed in s. 4(1) which says that
to the extent to which provisions have been made in the Act,
those provisions  shall override  the established provisions
in the texts of Hindu Law. [264G-H; 265A-B]
     2.6 The intention to depart from the pre-existing Hindu
law was again made  clear by  s. 19 of the Hindu Succession
Act which stated that
257
if two or more heirs succeed together to the property of an
intestate, they should take  the  property  as tenants-in-
common and  not as  joint tenants and according to the Hindu
law as obtained prior to Hindu  Succession Act two or more
sons succeeding to their  father's property  took  a  joint
tenants and  not tenants-in-common.  The Act,  however, has
chosen to  provide  expressly that  they  should  take  as
tenants-in-common. Accordingly the property  which devolved
upon heirs  mentioned in  class I of the Schedule under s. 8
constituted the absolute properties  and his  sons have  no
right by birth in such properties. [266F-H]
     Commissioner of  Income-tax, U.  P.  v.  Ram  Rakshpal,
Ashok Kumar,  67  I.T.R.  164; Additional  Commissioner  of
Income-tax, Madras  v. P.L.  Karuppan Chettiar, 114  I.T.R.
523; Shrivallabhdas  Modani v. Commissioner of Income-Tax,
M.P-I., 138  I.T.R. 673 and Commissioner of Wealth-Tax A.P.
II v. Mukundgirji 144 I.T.R. 18, approved.
     Commissioner of  Income-tax, Gujarat-l  v. Dr. Babubhai
Mansukhbai (Deceased), 108 I.T.R. 417, overruled.



JUDGMENT:
     CIVIL APPELLATE  JURISDICTION: Civil Appeal Nos. 166870
of 1974 etc.
     From the  Judgment and  order dated  17.8.1973  of the
Allahabad High Court in  W.T. Reference No. 371 of 1971 and
I.T. Reference No. 452 of 1971.
     V.S. Desai, and Miss A. Subhashini for the Appellants.
     P.K. Mukharjee and A. K. Sengupta for the Respondents.
     The Judgment of the Court was delivered by
     SABYASACHI MUKHARJI,  J. These appeals arise by special
leave from the decision of the High Court of Allahabad dated
17th August,  1973. Two of these  appeals are in respect of
assessment years  1966-67 and  1967-68 arising out  of the
proceedings under  the Wealth  Tax Act, 1957. The connected
reference was  under the Income-Tax Act, 1961 and related to
the assessment year 1968-69. A common question of law arose
in all these cases  and these were disposed of by the High
Court by a common judgment.
     One Rangi Lal and his son  Chander Sen  constituted a
Hindu
258
undivided family.  This family had some  immovable property
and the business carried on in the name of Khushi Ram Rangi
Lal. On October 10,  1961, there was a partial partition in
the family  by which  the business  was divided between the
father and  the son,  and thereafter, it was carried on by a
partnership consisting of the two. The firm was assessed to
income-tax as  a registered  firm and  the two partners were
separately assessed in respect of their share of income. The
house property of the family continued to remain joint. On
July 17,  1965, Rangi  Lal  died  leaving  behind  his son,
Chander Sen,  and his  grandsons, i.e. the sons  of Chander
Sen. His wife and mother predeceased him and he had no other
issue except  Chander Sen.  On his  death there was a credit
balance of  Rs.1,85,043 in  his account in the books of the
firm.  For  the assessment  year  1966-67  (valuation date
October 3,  1965), Chander  Sen,  who  constituted  a  joint
family with  his own sons, filed a return of his net wealth.
The return  included the property of the family which on the
death of  Rangi Lal passed on to Chander Sen by survivorship
and also  the assets  of the  business which  devolved upon
Chander Sen  on  the  death  of  his  father. The  sum  of
Rs.1,85,043 standing  to the  credit of Rangi Lal  was not
included in  the net  wealth of the family  of Chander Sen
(hereinafter referred  to as  'the assessee-family')  on the
ground that  this amount  devolved on  Chander Sen  in his
individual  capacity   and  was not  the  property  of the
assessee-family. The  Wealth-tax officer did not accept this
contention  and held  that  the  sum  of  Rs.1,85,043 also
belonged to the assessee-family.
     At the close of the previous year ending on October 22,
1962, relating to the assessment year 1967-68, a  sum  of
Rs.23,330 was  credited to  the account of late Rangi Lal on
account of  interest accruing  on his credit balance. In the
proceedings under the Income-tax Act for the assessment year
1967-68, the  sum of  R.S.. 23,330 was claimed as deduction.
It was alleged that  interest was due to Chander Sen in his
individual capacity  and was  an allowable  deduction in the
computation of the business  income of the assessee-faimly.
At the end of the year the credit balance in the account of
Rangi Lal  stood at Rs.1,82,742 which was transferred to the
account of Chander Sen. In the wealth-tax assessment for the
assessment year 1967-68, it  was claimed, as in the earlier
year, that  the credit balance in  the account of Rangi Lal
belonged to  Chander Sen  in his individual capacity and not
to the assessee-family. The Income-tax officer who completed
the assessment disallowed the claim relating to interest on
the ground  that it  was a  payment made  by Chander  Sen to
himself. Likewise,  in the wealth-tax assessment, the sum of
Rs.1,82,742 was included by  the Wealth-tax  officer in the
net wealth  of the  assessee-family. On appeal the Appellate
Assistant Commissioner of Income-tax accepted the assessee's
claim in
259
full. He held that the capital in the name of Rangi Lalluded
in the wealth of the assessee-family. He also directed that
in the income-tax assessment the sum of Rs.23,330 on account
of interest should be allowed as deduction. The revenue felt
aggrieved and  filed three  appeals  before  the  Income-tax
Appellate Tribunal,  two against  the assessments  under the
Wealth-tax Act for the assessment years 1966-67 and 1967-68
and one against the assessment under Income-tax Act for the
assessment  year   1967-68.  The   Tribunal  dismissed the
revenue's appeals.
     The following  question was  referred to the High Court
for its opinion:
 "Whether, on the facts and in the circumstances of
 the case,  the conclusion of the Tribunal that the
 sum  of   Rs.1,85,043 and   Rs.1,82,742  did not
 constitute  the   assets  of the  assessee-Hindu
 undivided family is correct?"
     Similarly in  the reference  under the  Income-tax Act,
the following question was referred:
 "Whether, on the facts and in the circumstances of
 the case,  the interest  of Rs,23,330 is allowable
 deduction  in the  computation  of  the  business
 profits of the assessee joint family?"
     The answer to the questions would depend upon whether
the amount  standing to the credit  of late  Rangi Lal was
inherited, after his death, by Chander Sen in his individual
capacity  or  as  a  Karta  of the  assessee  joint  family
consisting of himself and his sons.
     The amount in question represented the capital allotted
to Rangi  Lal on  partial partition  and accumulated profits
earned by  him as his share in the firm. While Rangi Lal was
alive this  amount could  not be said to belong to any joint
Hindu family  and qua  Chander Sen  and his sons, it was the
separate property  of Rangi  Lal. On  Rangi Lal's  death the
amount passed  on to  his son, Chander Sen, by inheritance.
The High  Court was  of the opinion that under the Hindu Law
when a son inherited separate and self-acquired property of
his father,  it assumed the character of joint Hindu family
property in his hands qua the members of his own family. But
the High  Court found  that this principle has been modified
by section 8 of the Hindu Succession Act, 1956.
260
Section 8  of the  said Act  provides, inter  alia, that the
property of  a male Hindu dying intestate devolved according
to the provisions of  that Chapter in the Act and indicates
further that  it will devolve first upon the heirs being the
relatives specified in class I of the Schedule. Heirs in the
Schedule Class I includes  and provides  firstly  son and
thereafter daughter,  widow and others. It is not necessary
in view of the facts of this case to deal with other clauses
indicated in  section 8 or other  heirs  mentioned  in the
Schedule. In this case as the High Court noted that the son,
Chander Sen was the only heir and therefore the property was
to pass to him only.
     The High Court in the judgment under appeal relied on a
bench decision of the said High Court rendered previously.
Inadvertently, in  the judgment of the High Court,  it had
been mentioned that the  judgment was in Khudi Ram Laha v.
Commissioner of Income-tax U.P, 67 I.T.R. 364. but that was
a case which dealt  with entirely  different  problem. The
decision which the High  Court had  in mind and on which in
fact the  High Court  relied was  a decision  in the case of
Commissioner of Income-tax, U. P. v. Ram Rakshpal,  Ashok
Kumar, 67  I.T.R. 164. In the said decision  the Allahabad
High Court  held that in view of the provisions of the Hindu
Succession Act, 1956, the income from assets inherited by a
son from  his father from whom he had separated by partition
could not  be assesssed as the income of the Hindu undivided
family of  the son.  The High Court relied on the commentary
in Mulla's  Hindu Law, Thirteenth Edition page 248. The High
Court also  referred to certain passages  from Dr. Derret's
"Introduction to  Modern Hindu Law" (paragraph 411, at page
252). Reliance was also  placed on  certain observations of
this Court  and the  Privy Council  as well  as on  Mayne's
'Hindu Law'.  After discussing all these  aspects the Court
came to the conclusion that the  position of the Hindu Law
was that  partition took  away by  way of  coparcenary the
character of  coparcener property which meant that the share
of  another  coparcener upon  the  divisions  although the
property obtained  by a coparcener by a partition continued
to be  coparcenary property  for  him  and  his unseparated
issue. In  that case  what had happened was one Ram Rakshpal
and his father, Durga Prasad, constituted a Hindu undivided
family which  was assessed  as such.  Ram Rakshpal separated
from his father by partition on October 11, 1948. Thereafter
Ram Rakshpal started business of his own, income whereof was
assessed in  the hands of the assessee-family. Shri  Durga
Prasad also  started business  of his own after partition in
the name and style of M/s Murlidhar Mathura Prasad which was
carried on by him till his death.
261
Durga Prasad  died on  March 29, 1958 leaving behind him his
widow, Jai  Devi, his  married daughter,  Vidya Wati and Ram
Rakshpal  and  Ram  Rakshpal's son,  Ashok  Kumar,  as his
survivors. The assets left  behind by Durga Prasad devolved
upon three  of them  in equal shares by succession under the
Hindu Succession  Act, 1956.  Vidya Wati took away her 1/3rd
share, while  Jai Devi and Shri  Ram Rakshpal continued the
aforesaid business  inherited by  them in  partnership with
effect from  April, 1, 1958 under  a partnership deed dated
April 23,  1958. The  said firm was granted registration for
the assessment year 1958-59. The share of profit of Shri Ram
Rakshpal  for the  assessment year  under  reference was
determined at Rs.4,210. The assessee-family contended before
the Income-tax Officer that  this profit  was the  personal
income of  Ram Rakshpal and could not be taxed in the hands
of the Hindu undivided family of Ram Rakshpal, and held that
Ram  Rakshpal contributed  his   ancestral  funds  in the
partnership business  of Murli Dhar Mathura Prasad and that,
hence, the  income therefrom was taxable in the hands of the
assessee family.  The High Court finally held on these facts
in C.I.T  v. Ram  Rakshpal (supra)  that the  assets of the
business left  by Durga Prasad in the hands of Ram Rakshpal
would be  governed by section 8 of the Hindu Succession Act,
1956.
     The High  Court in the Judgment under appeal was of the
opinion that  the facts of this case were identical with the
facts in  the  case  of Commissioner  of  Income-tax, U.P.
(supra) and the principles applicable would be the same. The
High  Court   accordingly  answered   the  question  in the
affirmative  and  in  favour  of  the  assessee so  far  as
assessment of  wealth-tax is  concerned. The High Court also
answered  necessarily the  question on  the  income-tax
Reference affirmatively and in favour of the assessee.
     The question  here, is,  whether the  income  or  asset
which a son inherits  from his father when  separated  by
partition the same should be assessed as income of the Hindu
undivided family  of son  or his individual income. There is
no dispute  among the  commentators on Hindu Law nor in the
decisions of  the Court that under  the Hindu Law as it is,
the son would inherit the same as karta of his own family.
But the question, is, what is the effect of section 8 of the
Hindu Succession  Act, 1956?  The Hindu Succession Act, 1956
lays down  the general rules of  succession in the case of
males. The  first rule is that the property of a male Hindu
dying intestate shall devolve according to the provisions of
Chapter II  and class  I of  the Schedule  provides that  if
there is  a male  heir of  class  I  then  upon  the  heirs
mentioned in class I of
262
the Schedule. Class I of the Schedule reads as follows:
 "Son; daughter;  widow;  mother;  son of  a pre-
 deceased son; daugther of  a predeceased son; son
 of a pre-deceased daughter, daughter of  a pre-
 deceased daughter;  widow of a pre-deceased son;
 son of  a pre-deceased  son of a pre-deceased son;
 daughter of  a pre-deceased  son of a pre-deceased
 son; widow of a pre-deceased son of a pre-deceased
 son."
     The heirs mentioned in class I of the Schedule are son,
daughter etc.  including the  son of  a pre-deceased son but
does not include specifically the grandson, being a son of a
son living.  Therefore, the short question, is, when the son
as heir of class  I of the Schedule inherits the property,
does he do so in his individual capacity or does he do so as
karta of his own undivided family?
     Now the Allahabad High Court has noted that the case of
Commissioner of Income-tax, U.P.  v.  Ram  Rakshpal,  Ashok
Kumar (supra)  after referring to the relevant authorities
and commentators had observed at page 171 of the said report
that there  was no  scope for  consideration of a wide and
general nature about the objects attempted to be achieved by
a piece of legislation when interpreting the clear words of
the enactment. The learned judges observed referring to the
observations of Mulla's Commentary  on Hindu  Law, and the
provisions of  section 6 of the Hindu Succession Act that in
the case  of assets  of the  business left  by father in the
hands of  his son  will be  governed by section 8 of the Act
and he would take  in his  individual capacity.  In this
connection reference was also made before us to section 4 of
the Hindu Succession Act. Section 4 of the said Act provides
for overriding effect of  Act. Save  as otherwise expressly
provided in  the Act,  any text,  rule or  interpretation of
Hindu Law  or any  custom or  usage as part of that law in
force immediately  before the commencement of this Act shall
cease to  have effect  with respect  to any matter for which
provision is  made in  the Act and any other law  in force
immediately before  the commencement  of the Act shall cease
to apply  to Hindus in so far it is inconsistent with any of
the provisions contained in  the Act. Section 6 deals with
devolution of  interest in coparcenary property and it makes
it clear  that when a male Hindu dies after the commencement
of the Act having at the time of his death an interest in a
Mitakshara  coparcenary  property,  his   interest  in the
property shall devolve by  survivorship upon  the surviving
members of the coparcenary and not
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in accordance  with the Act. The  proviso indicates that if
the deceased  had  left him  surviving a  female  relative
specified in  class I  of the  Schedule or  a male  relative
specified in  that class  who  claims  through such  female
relative,  the interest  of  the  deceased  in  Mitakshara
coparcenary  property shall  devolve by  testamentary  or
intestate succession, as the case may be, under this Act and
not by survivorship.
     Section 19 of the said Act  deals with  the  mode  of
succession of  two or  more heirs.  If two  or more  heirs
succeed together to the property of an intestate, they shall
take the  property per capita and  not per  stripes and  as
tenants-in-common and not as joint tenants.
     Section 30 stipulates that any Hindu may dispose of by
will or other testamentary  disposition any property, which
is capable of being so disposed of by him in accordance with
the provisions of the Indian Succession Act, 1925.
     It is  clear that under the Hindu law, the moment a son
is born,  he gets  a share  in the  father's  property and
becomes part  of the  comparcenary. His right accrues to him
not on the death  of the  father or  inheritance  from the
father but  with the  very  fact  of  his  birth.  Normally,
therefore whenever  the father gets a property from whatever
source from  the grandfather or from any other source, be it
separated property  or not,  his son  should have a share in
that and  it will become part of the joint family of his son
and grandson  and other members who form joint Hindu family
with him.  But the  question is; is the position affected by
section 8  of the  Succession Act,  1956 and if so, how? The
basic argument is that section 8  indicates the  heirs  in
respect of  certain  property  and  class  I  of  the  heirs
includes the son but not the grandson. It includes, however,
the son of the predeceased son.  It is this position which
has mainly  induced the Allahabad High Court in  the two
judgments, we have noticed, to take the view that the income
from the  assets inherited  by son from his father from whom
he has separated by  partition can be assessed as income of
the  son   individually.  Under  section  8  of  the  Hindu
Succession Act, 1956 the  property of the father  who dies
intestate devolves on his son in his individual capacity and
not as karta of  his own  family. On  the other  hand, the
Gujarat High Court has taken the contrary view.
     In Commissioner of  Income-tax,  Gujarat-I  v. Dr.
Babubhai Mansukhbhai  (Deceased), 108 I.T.R. 417 the Gujarat
High Court  held that  in the case of Hindus governed by the
Mitakshara law, where a son
264
inherited the  self-acquired property of his father, the son
took it as the joint family property of himself and his son
and not as his separate property. The correct status for the
assessment to  income-tax of  the son  in  respect  of such
property was as representing his Hindu undivided family. The
Gujarat High  Court  could  not  accept  the  view  of the
Allahabad High Court mentioned hereinbefore. The  Gujarat
High Court  dealt with the relevant  provisions of  the Act
including section  6 and  referred to Mulla's Commentary and
some other decisions.
     Before we consider this  question further,  it will be
necessary to  refer to the view  of the  Madras High Court.
Before the  full bench of Madras  High Court  in Additional
Commissioner  of   Income-tax, Madras v.  P.L.   Karappan
Chettiar, 114  I.T.R. 523,  this question arose. There, on a
partition effected on March 22, 1954, in the Hindu undivided
family consisting  of P,  his wife,  their sons, K and their
daughter-in-law, P  was allotted  certain properties  as and
for this share and got separated. The partition was accepted
by the revenue under  section 25A  of the Indian Income-tax
Act, 1922. K along with his wife and their subsequently born
children constituted  a Hindu  undivided  family  which was
being assessed in that status. P died on September 9, 1963,
leaving behind his widow  and divided son, K, who was the
karta of  his Hindu undivided family, as his legal heirs and
under section  8 of  the Hindu Seccession  Act,  1956, the
Madras High  Court held, that these two persons succeeded to
the properties left by the deceased, P, and divided the
properties among  themselves. In  the assessment made on the
Hindu undivided family of  which K  was the  karta, for the
assessment year 1966-67 to  1970-71, the Income-tax Officer
included  for assessment  the income received  from the
properties inherited  by K from his father, P. The inclusion
was confirmed  by the  Appellate Assistant Commissioner but,
on further appeal, the Tribunal held that the properties did
not form  part of  the joint family properties and hence the
income therefrom  could not  be assessed in the hands of the
family. On  a reference to the High Court at the instance of
the revenue,  it was  held by  the Full bench that under the
Hindu law,  the property  of a male Hindu  devolved on his
death on  his sons  and grandsons as the grandsons also have
an interest in the property. However, by reason of section 8
of the Hindu Succession  Act, 1956,  the  son's  son gets
excluded and  the son  alone inherits  the property  to the
exclusion of  his son. No  interest  would  accrue  to the
grandson of  P in  the property left by him on his death. As
the effect  of section 8 was directly derogatory of the law
established according  to Hindu law, the statutory provision
must prevail  in view  of the  unequivocal intention  in the
statute itself,
265
expressed in  section 4(1)  which says that to the extent to
which provisions have been made in the Act, those provisions
shall override the established provisions in the texts of
Hindu law.  Accordingly, in  that case, K  alone  took the
properties obtained  by his  father,  P,  in  the  partition
between them, and irrespective of the question as to whether
it was ancestral property in the hands of K or not, he would
exclude his son. Further, since the existing grandson at the
time of the death  of the grandfather had been excluded, an
after-born son of the son will  also not  get any interest
which the  son inherited  from the father. In respect of the
property obtained by K on the death of his father, it is not
possible  to  visualise or  envisage  any  Hindu  undivided
family. The   High  Court   held  that the  Tribunal was,
therefore, correct  in holding that the properties inherited
by K  from his divided father constituted his separate and
individual properties  and not the properties of the joint
family consisting  of himself, his wife, sons and daughters
and hence  the income  therefrom was  not assessable  in the
hands of  the assessee-Hindu  undivided family. This view is
in consonance  with the view of  the Allahabad High  Court
noted above.
     The Madhya Pradesh High Court had occasion to consider
this aspect  in Shrivallabhdas Modani v.  Commissioner  of
Income-Tax, M.P.-I,  138 I.T.R. 673, and the Court held that
if there  was no  coparcenary subsisting between a Hindu and
his sons  at the  time of  death  of  his  father,  property
received by  him on  his father's  death  could not  be  so
blended with  the property  which had  been allotted  to his
sons on a partition  effected prior  to the  death  of the
father. Section 4 of the Hindu Succession Act, 1956, clearly
laid down  that "save  as expressly provided in the Act, any
text, rule  or interpretation  of Hindu law or any custom or
usage as  part of  that law  in force immediately before the
commencement of the Act  should cease to have effect with
respect to  any matter for which  provision was made in the
Act". Section  8 of  the Hindu Succession Act, 1956 as noted
before, laid  down the scheme of succession to the property
of a  Hindu dying  intestate. The  schedule  classified the
heirs on  whom such property should devolve. Those specified
in class I took simultaneously to the exclusion of all other
heirs. A  son's son was not mentioned as an heir under class
I of  the schedule,  and, therefore,  he could not get any
right  in   the property   of his  grandfather  under the
provision. The right of  a son's  son in  his grandfather's
property during the lifetime  of his  father which  existed
under the  Hindu law  as in  force before  the Act,  was not
saved expressly by the Act,  and  therefore, the  earlier
interpretation of  Hindu law giving a right by birth in such
property "ceased to have effect". The Court
266
further observed  that in construing a Codification Act, the
law which  was in  a force earlier should be ignored and the
construction should  be confined to the language used in the
new Act. The High Court felt that so construed, section 8 of
the Hindu Succession Act should be taken as a self-contained
provision  lying  down the  scheme  of devolution  of the
property of a Hindu dying intestate. Therefore, the property
which devolved on a  Hindu  on the  death  of his  father
intestate  after   the coming into  force  of  the  Hindu
Succession  Act,  1956, did  not  constitute  HUF  property
consisting of his own branch including his sons. It followed
the full  bench decision of the Madras High Court as well as
the view  of the Allahabad High Court in the two cases noted
above including the judgment under appeal.
     The  Andhra   Pradesh  High   Court  in   the  case  of
Commissioner of Wealth-Tax,  A.P.-II  v.  Mukundgirji, 144
I.T.R. 18,  had also  to consider the aspect. It held that a
perusal of  the Hindu  Succession Act, 1956 would  disclose
that Parliament wanted to  make a  clean break from the old
Hindu law  in certain  respects consistent  with modern and
egalitarian concepts. For the sake of removal of any doubts,
therefore, section  4(1)(a) was inserted. The High Court was
of the opinion that  it would, therefore, not be consistent
with the  spirit and  object  of  the  enactment  to  strain
provisions of  the Act to accord with the prior notions and
concepts of  Hindu law. That such a course was not possible
was made clear by the inclusion of females in class I of the
Schedule, and according to the Andhra Pradesh High Court, to
hold that  the property which devolved upon a Hindu under
section 8 of the Act would be HUF property in his hands vis-
a-vis his  own sons  would amount  to creating two  classes
among the  heirs mentioned  in class I, viz., the male heirs
in whose  hands it  would be joint family property vis-a-vis
their sons;  and female heirs with  respect to whom no such
concept could  be applied  or contemplated. The intention to
depart from  the pre-existing Hindu law was again made clear
by section  19 of the Hindu Succession Act which stated that
two or more heirs  succeed together  to the  property of an
intestate, they should take  the  property  as tenants-in-
common and  not as  joint tenants and according to the Hindu
law as obtained prior to Hindu  Succession Act two or more
sons succeeding to their  father's property  took  a  joint
tenants and  not tenants-in-common.  The Act,  however, has
chosen to  provide  expressly that  they  should  take  as
tentants-in-common. Accordingly the property which devolved
upon heirs  mentioned in  class I  of the  Schedule  under
section 8  constituted the  absolute properties and his sons
have no right by  birth in  such properties. This decision,
however,
267
is under  appeal by certificate to this Court. The aforesaid
reasoning of  the High Court appearing at pages 23 to 26 of
Justice Reddy's view in 144 I.T.R. appears to be convincing.
     We have  noted the divergent views  expressed on this
aspect by the Allahabad High Court, Full Bench of the Madras
High Court, Madhya Pradesh and Andhra Pradesh High Courts on
one side and the Gujarat High Court on the other.
     It is  necessary to  bear in  mind the  Preamble to the
Hindu Succession  Act, 1956. The Preamble states that it was
an Act to amend  and codify  the law  relating to intestate
succession among Hindus.
     In view  of the  preamble to  the Act,  i.e.,  that  to
modify where necessary and to codify the law, in our opinion
it is  not possible when Schedule indicates heirs in class I
and only  includes son and does  not include  son's son but
does include  son of a predeceased son, to say that when son
inherits the  property in  the situation  contemplated  by
section 8  he takes it as karta of his own undivided family.
The Gujarat  High Court's  view noted  above,  if  accepted,
would mean  that though the son of a predeceased son and not
the son of a  son who is intended  to be  excluded  under
section 8  to inherit, the latter would by applying the old
Hindu law get a right by birth of the said property contrary
to the scheme outlined in section 8. Furthermore as noted by
the Andhra Pradesh High Court that the Act makes it clear by
section 4  that one  should look to the Act in case of doubt
and not to the pre-existing Hindu law. It would be difficult
to hold today the  property which devolved on a Hindu under
section 8  of the  Hindu Succession would be HUF in his hand
vis-a-vis his  own son; that would  amount to creating two
classes among the heirs mentioned in class I, the male heirs
in whose  hands it  will be  joint Hindu family property and
vis-a-vis son  and female heirs with respect to whom no such
concept could be  applied  or  contemplated. It  may  be
mentioned that heirs in class I of Schedule under section 8
of the Act included  widow, mother, daughter of predeceased
son etc.
     Before we conclude we may state that we have noted the
obervations of Mulla's Commentary  on Hindu  law 15th Edn.
dealing with  section 6 of the Hindu Succession Act at page
924-26 as  well as  Mayne's on Hindu Law, 12th Edition pages
918-919.
     The express  words of section 8 of The Hindu Succession
Act,
268
1956 cannot  be ingorned  and must  prevail. The preamble to
the Act reiterates that  the Act is, inter alia, to 'amend'
the law,  with that  background the  express language  which
excludes son's son but included son  of a  predeceased son
cannot be ignored.
     In the  aforesaid light  the  views  expressed  by the
Allahabad High Court, the Madras High Court, Madhya Pradesh
High Court,  and the Andhra Pradesh High Court, appear to us
to be  correct. With respect we are unable to agree with the
views of the Gujarat High Court noted hereinbefore.
     In the premises the judgment and order of the Allahabad
High Court  under appeal  is affirmed  and the appeals Nos.
1668-1669 of  1974 are dismissed  with costs. Accordingly
Appeal No.  1670 of  1974 in Income-tax Reference which must
follow as  a consequence  in view  of the  findings that the
sums standing  to the credit of Rangi Lal belongs to Chander
Sen in his individual capacity and  not  the joint  Hindu
family, the   interest of  Rs.  23,330  was  an  allowable
deduction in  respect of  the income  of the family from the
business. This appeal also  fails  and is  dismissed with
costs.
     The Special  Leave Petition  No. 5327 of 1978 must also
fail and is dismissed. There will be no order as to costs of
this.
A.P.J.     Appeals and Petition dismissed.
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