Patna High Court
Gopiram Bhagwan Das vs Commissioner Of Income Tax on 14 October, 1958
Equivalent citations: AIR1959PAT246, [1960]39ITR513(PATNA)
Author: V. Ramaswami
Bench: V. Ramaswami
JUDGMENT V. Ramaswami, C.J.
1. In this case the assessee is a Hindu undivided family of which Banarsilal and Lakhiram are junior coparceners. For the assessment year 1946-47, an estimate of the income was made by the Income-tax department at Rs. 25,883/- which was later modified on appeal to Rs. 23,883/-. After making the original estimate the Income-tax Department received an information that in the relevant accounting year two collieries had been acquired by the Hindu undivided family in the names of Banarsilal and Lakhiram for a sum of Rs. 15,000/-. Proceeding under Section 34 was accordingly instituted against the assessee.
The assessee explained that the collieries were not the properties of the Hindu undivided family but were separate properties of Banarsilal and Lakhiram. With regard to source of money, the statement of the assessee was that gold weighing 260 bharis was purchased on 12-2-1929, and ornaments prepared out of the gold were presented to the wives of Banarsilal and Lakhiram; that gold ornaments weighing 172 bharis were given to Banarsilal's wife and gold ornaments weighing 95 bharis were given to Lakhiram's wife: that on 28-6-1945, most of the ornaments were sold, in Calcutta by Banarsilal and Lakhiram for Rs. 19,437/8/ and that out of these ornaments the quota of Banarsilal was 160 bharis of gold which was sold for Rs. 12,440/- and the quota of Lakhiram was 90 bharis of gold which was sold for Rs. 6,997/8/-.
In support of his explanation a voucher from Sheopujan Kai of Calcutta, dated 18-6-1945, was produced on behalf of the assessee. Banarsilal and Lakhiram were also examined before the Income-tax Officer as witnesses on behalf of the assessee. The statements of the two witnesses, Banarsilal and Lakhiram, were disbelieved by the Income-tax officer for several reasons. He also held that the voucher dated 28-6-1945, from Sheopujan Rai of Calcutta was unreliable.
The finding of the Income-tax Officer was that the assessee had failed to prove that Banarsilal and Lakhiram had acquired the two coal mines out of their separate funds and that neither Banarsilal nor Lakhiram had any separate source of income. The Income-tax Officer accordingly held that the amount of Rs. 15,000/- was secreted income liable to be assessed in the hands of the Hindu undivided family.
An appeal was taken by the assessee to the appellate Assistant Commissioner against the order of the income-tax Officer, but the appeal was dismissed by the Appellate Assistant Commissioner, and the order of the Income-tax Officer was affirmed. The assessee took a further appeal to the Income-tax Appellate Tribunal, and the contention of the assessee was that the properties were not the acquisitions of the Hindu undivided family and the finding of the Appellate Commissioner on that point was not supported by any material.
Reference was made on behalf of the assessee to the statement in the partition deed dated 13-9- 1952, that Banarsi Lal and Lakhiram had acquired the property out of their separate earnings. The tribunal rejected the contention of the assessee on the ground that the statement in the deed of partition dated 13-9-1952, is contradicted by the explanation of the assessee that the coalfields were acquired from the stridhan properties of their wives. The finding of the Tribunal was that there was sufficient nucleus of the Hindu joint family to warrant the finding that the two coal mines had been acquired from the funds of the Hindu undivided family and that the assessee was not able to show that the junior members, Banarsilal and Lakhirara had any separate funds of their own. The Appellate Tribunal accordingly dismissed the appeal of the assessee and affirmed the finding of the Appellate Assistant Commissioner that the amount of Rs. 15,000/- was represented the secreted profits liable to be taxed in the hands of the Hindu undivided family.
2. Under Section 66(2) of the Income-tax Act, the Income-tax Appellate Tribunal had stated a case on the following question of law and submitted it to the High Court:
"Whether in the facts and circumstances of the case the amount of Rs. l5,000/- representing the consideration for taking two leases, is liable to be assessed in the hands of the Hindu undivided family?"
3. On behalf of the assessee Mr. S.N. Dutta put forward the argument that the Income-tax Appellate Tribunal has wrongly placed the onus of proof upon the assessee to show that the two junior coparceners, Banarsilal and Lakhiram had purchased the coalfields out of their separate earnings. The submission of learned counsel was that the onus lay upon the Income-tax Department to produce materials to show that the amount of Rs. 15,000/-was income liable to be assessed in the hands of the Hindu undivided family.
In support of his argument learned counsel referred to the decisions of Fadampat Singhania v. Commissioner of Income-tax, U. P., 1953-24 I.T.R. 184 : (AIR 1953 All 773); D.D. Kapoor v. Commissioner of Income-tax B. and O. 1955-2? I.T.R. 348 : ( (S) AIR 1955 Pat 102) and Mangilal Rungta v. Commissioner of Income-tax, B. and O. 1955-28 I.T.R. 167 : (AIR 1955 Pat 366). In my opinion the argument of learned counsel on behalf or the assessee is misconceived and cannot be accepted as correct. I hold that, in the circumstances' of this ease the Tribunal was right in. holding that the onus lay upon the assessee to show that the coal mines had been acquired by Banarsilal and Lakhiram out of their separate funds.
It should be noticed in this connection that the Tribunal has come to a finding of fact that mere was sufficient nucleus of the Hindu undivided family to enable acquisition of the two collieries. Upon that finding of fact the Tribunal was right, as a matter of law, in Holding that the onus lay upon the assessee to show that the two collieries were acquired from the separate funds of Banarsilal and Lakhiram. The law on this point has been correctly summarised at page 268 of Mulla's Hindu Law, 11th edition, as follows :
"When a nucleus of joint family property is proved or admitted a presumption arises that the whole of the property of the joint family is joint including any acquisition by a member of the joint family. But no such presumption would arise if the nucleus is such that with its help the property claimed to be joint could not have been acquired. In order to give rise to the presumption the nucleus must be such that with its help the property claimed to be joint could have been acquired. When however it is not known whether the nucleus was such that from its income the property could be acquired, and no other source of income is disclosed the presumption is to be made that the nucleus was sufficient to enable the property to be acquired. Such being the presumption if any member of the family claims any portion of the property, as his separate property, the burden lies upon him to show that it was acquired by him in circumstances which would constitute it his separate property. He may do so by showing that the income of the existing ancestcal property was employed in other ways, or was kept intact. If he adduces no evidence, the presumption that the property was joint family property, must prevail.
The same view was expressed by the Judicial Committee in Lal Bahadur v. Kanhaiya Lal, 34 Ind App 65 and Rajangam v. Rajangam, 50 Ind App 134 at p. 141 : (AIR 1922 PC 266 at p. 268) and by the Madras High Court in Venkataramayya v. Seshamma ILR (1937) Mad 1012 : (AIR 1937 Mad 538).
4. I shall now deal with the cases relied upon by the learned counsel on behalf of the assessee. In 1953-24 I.T.R. 184 : (AIR 1953 All 773) the question at issue was whether the income of a minor coparcener o£ a Hindu undivided family from his share of the partnership business was really the income of the Hindu undivided family liable to be assessed in the hands of the Karta.
It was held by the Allahabad High Court that there is no presumption that any business carried on by a member of a joint Hindu family was joint family business, and it was for those who allege that it was so to prove it. The decision of the Allahabad High Court was based upon the Privy Council case in Annamalai Chetty v. Subramanian Chetty AIR 1929 P. C. 1 where the proposition was stated, that it was open to a member of the Hindu undivided family to carry on a business and there was no presumption that any such business belonged to the joint family.
It is manifest that the ratio of the Allahabad decision, 1953-24 I.T.R. 184: (AIR 1953 All 773) has no application to the present case where the material facts are different. Reference was also made on behalf of the assesses to 1955-27 I.T.R. 34S : ((S) AIR 1955 Pat 102) in which the question for determination was whether the income of a member of a joint Hindu family from a partnership business in which he was a partner was joint family income.
It was held by this High Court, following the decision of the Privy Council in AIR 1929 P. C. 1, that there was no presumption of Hindu law that any business carried on by a member of a joint Hindu family was itself a joint family business. The decision of this case has also no bearing on the question presented for determination in the present case. Reliance was also placed on behalf of the assessee upon the decision of this High Court in 1955-28 I.T.R. 167 : (AIR 1955 Pat 366).
The principle laid down in that case is exactly the same as in 1955-27 I.T.R. 348 : ((S) AIR 1955 Pat 102). The learned Judges who decided the case 1955-28 I.T.R. 167 :' (AIR 1955 Pat 366) expressly stated that the ratio of the decision in 1955-27 I.T.R. 348 : ((S) AIR 3955 Pat 102) was also the basis of their decision. In my opinion, the present case does not fall within the principle laid down by any of these authorities, because the question at issue is not whether a business carried on by a coparcener of a Hindu undivided family is a joint family business.
5. For the reasons I have already expressed, I hold that, in the facts and circumstances of this case, the amount of Rs. 15,000/- representing the consideration for taking the two leases of collieries, is liable to be taxed in the hands of Hindu undivided family. Accordingly, the question referred to the High Court by the Income-tax Appellate Tribunal must be answered against the assessee and in favour of the Income-tax Department. The assessee must pay the costs of this reference. Hearing fee Rs. 250/-.
Kanhaiya Singh, J.
6. I agree.