A Jain undivided family is not a Hindu undivided family for the purposes of the Wealth Tax Act, 1957.

( 1 ) THIS reference, under Section 27 (1) of the Wealth-tax Act, 1957, has been made in the circumstances hereinafter related.

( 2 ) FOR the assessment year 1957-1958 (the relevant valuation date being December 31, 1956) the Wealth-tax Officer assessed the assessee Sm. Champa Kumari Singhi, in respect of family assets, in the status of a Hindu Undivided Family. Against the order of assessment, the assessee appealed before the Appellate Assistant Commissioner and, inter alia, contended. (1) that regard being had to the description of the assesses in the notice of demand, as Champa Kumari Singhi and ors. , the assessee should be deemed to nave been treated as an association of persons and that such a unit was not chargeable to tax under the Wealth-tax Act. (2) that the assessee being a member of a Jain family could not be treated as a Hindu Undivided Family. (3) that even if the assessee be treated as a Hindu Undivided Family the imposition of Wealth-tax on a Hindu Undivided Family was ultra vires the Constitution.

( 3 ) THE Appellate Assistant Commissioner negatived all the three contentions with the following observation :--"as regards the objection regarding the description of the assessee there is no substance in the objection. Only for the sake of conciseness the assessee has been described as Sm. Champa Kumari Singhi and ors. Sri Bhandari's objection is that the names of the other members of the H. U. F. should have been included. This is purely a matter of convenience. The status has been correctly described in the D. N. itself as H. U. F Therefore, there is no force in this objection of Sri Bhandari. The contention that the word H. U. F. does not include a Jain family is also not correct It has been held that the Hindu Law applies to Jains, Sikhs and even the Khoja Muslims of Bombay. Therefore, there is no force in this contention. The third objection that the W. T. Act does not apply to H. U. F. has also been answered by the Bombay High Court in the case of Mahabir Prasad Badridas, Bhandari's another objection is that though that case has decided the point that the W. T. Act applies to H. U. F. the point is not very clear in the case of Mitakshara families. In the present case no evidence has been produced that the assessee is governed by Mitakshara Law. Even assuming that this is correct there is no scope for the argument of Sri Bhandari. The case cited above has decided that the word 'individual' mentioned in entry 86 of list I of the 7th Schedule to the Constitution includes H. U. F. The discussion of the learned Judge Sri S. T. Desai regarding the ownership of property by the Hindu family probably lends scope of Sri Bhandari's argument. But though a Mitakshara family can be considered a owner of the property it is not the real or the legal owner of the property. This is because a Hindu family cannot be such negotiate for sale or purchase or mortgage of any property. The machinery through which the Hindu family operates is the Karta. Therefore, for all legal purposes the Karta is to be considered as the individual referred to entry 86 of List I of the 7th Schedule to the Constitution. "

( 4 ) AGAINST the order of the Appellate Assistant Commissioner, the assessee and the Revenue both appealed to the Appellate Tribunal. We need not concern ourselves with the result of the departmental appeal, because that is not the subject matter of this reference. In support of the appeal the assessee submitted (i) that even if it be assumed for the sake of argument that an assessee can be assessed in the status of a Hindu undivided family, the assessee being governed by the Mitakshara School of Hindu Law, the Imposition of Wealth tax on the Hindu Undivided Family was beyond the competence of the Parliament inasmuch as entry 86 of List I of the 7th Schedule of the Constitution of India, which is the only entry under which tax on capital value of assets can be assessed, permits imposition of such tax only on individu