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1. This is an income-tax reference under Section 256(1) of the income-tax Act 1961. The case was heard by a Division Bench of those court and the learned Judges referred the question to a Full Bench in view of the conflicting opinions expressed by the Assam and the Allahabad High Courts with which view this Court concurred on the one hand and the Gujarat High Court on the other. We shall presently refer to this conflict. But before that, we shall extract the question which has been referred to us for our opinion, which is as follows-

3. There is a direct authority on the question arising from the above facts of this court, in TC 276 of 1972 : (1977 Tax LR 1420) (Mad) (Addl. Commr. of Income-tax Madras II v. v. R. A. Manicka Mudaliar) which would enable us to answer the question in the affirmative. This decision followed the view expressed by the Allahabad High Court in the decision in Commr. of Income-tax U. P. v. Ram Rakshpal (1968) 67 ITR 164 and the Assam High Court in Ghasiram Agarwala v. Commr. of Gift-tax, Assam 69 ITR 235 : (AIR 1967 Assam 48). The decision of the Allahabad High Court was earlier to the decision of the Assam High Court, but the latter decision did not refer to the Allahabad decision. Since then. the Gujarat High Court had to deal with this matter in Commr. of Wealth Tax v. Harshadlal Manilal (1974) 97 ITR 86 when the question arose under the Wealth-tax Act and the same court again dealt with the question under the Income-tax Act in Commr. of Income-tax v. Babubai Mansukhbhai (1977) 108 ITR 417 (Guj)

4. We may pause here to point out that the question has not been discussed by the Assam High Court in Ghasiram Agarwala v. Commr. of Income-tax, 69 ITR 235 : (AIR 1967 Assam 48), and the conclusion that has been reached by that court on the principles of the ancient Hindu Law, with great respect appears to us to be erroneous and may require reconsideration. We do not wish to deal with that matter in this case. The Allahabad High Court in Commr. of Income-tax U. P. v. Ram Rakshpal (1968) 67 ITR 164 had dealt with the matter at great length and has given reasons for the conclusion that on the facts and circumstances of the case, Section 8 of the Hindu Succession Act (hereinafter called the 'Act') has provided for a devolution of interest when inheritance opens on the death of a grandfather, the son and the grandson being alive at the time of the death of the grandfather, which is quite different from the principle that obtained before the advent of the Act. This view of the Allahabad High Court has not been accepted by the Gujarat High Court. There is not much reasoning in the decision in Commr. of Wealth Tax v. Harshadlal Manilal (1974) 97 ITR 86. But the matter has been discussed in the decision in Commr. Income-tax v. Babubhai Mansukhbhai (1977) 108 ITR 417, by B. J. Divan C. J. We need, therefore consider only the decision of the Allahabad High Court and the decision of the Gujarat High Court in Commr. of Income-tax v. Babubhai Mansukhbhai (1977) 108 ITR 417. Our attention was drawn to the decision of the Mysore High Court in Commr. of Income-tax v. Smt Nagarathnamma (1970) 76 ITR 352. But that Court was concerned with Section 6 of the Act and not with Section 8 of the Act. Therefore, this decision is not helpful in answering the question. Before dealing with the Allahabad High Court decision and the Gujarat High Court decision, we would like to refer to the salient provisions of the Act. Referring to the preamble to the statute, it is clear that what was intended by enacting the statute was to provide for intestate succession among Hindus. The preamble reads-

"The Division Bench there held that in view of the provisions of Section 6 and Section 8 of the Hindu Succession Act, the old position no longer prevailed and the income from assets inherited by a son from his father must be held to be his individual and not the income of the Hindu undivided family consisting of himself and his son. Main reliance in support of this conclusion was placed by the Allahabad High Court on the provisions of Sections 6 and 8 of the Hindu Succession Act. The Allahabad High Court accepted the principle that if it had not been for the Hindu Succession Act, on the death of a father whatever was inherited by his son by way of succession became ancestral property in the son's hands and this ancestral property in the hands of the son belonged to the coparcenary or the joint Hindu family consisting of the son and his own male issue.........................