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1967 Supreme(MP) 63
High Court of Madhya Pradesh
P.V. Dixit, C.J. & R.J. Bhave, J.
Narsinghdas Kanhaiyalal
Vs.
Commissioner of Wealth Tax
M.C.C. No. 17 of 1966
Decided on : 8.8.1967
R.S. Dabir for applicant;
M. Adhikari & P.S. Khirwadkar for opposite party
Headnote:(1) Hindu Law – partition - grant of property to a Hindu female - no presumption of limited estate – to make the estate limited there should be express words in the grant -grant setting out its purpose as maintenance of the female - does not make it a limited estate.
There is no presumption that when a grant of some property is made to a Hindu female she gets only a limited estate. There must be express words in the grant indicating that it was to endure for the life time of the female. There is no warrant for the proposition that when a grant of an immoveable property is made to Hindu female, she does not get an absolute or alienable interest in such property, unless such power is expressly conferred upon her. The position is no different in the case of movable property given to a Hindu female in partition. AIR 1951 SC 139 & AIR 1954 SC 355 relied on.
The purpose of the grant cannot by itself restrict or cut down to life interest an estate taken by the female in whose favour the grant was made. The desire expressed in the partition deed to maintain the female would only show the motive which prompted the donor to give the property. But it cannot be read as a measure of the extent of her right in the property. AIR 1954 SC 355 & AIR 1933 PC 67 relied on. [Para 7]
(2) Hindu Law – partition - paternal grand-mother - is entitled to a share when her sons and his sons separate.
A paternal grand mother is entitled to share when a partition takes place between her sons and his sons, 33 MPLC 42=ILR 1946 Nag. 732 followed AIR 1918 Pat. 91, ILR 8 Cal. 649, relied on. ILR 34 All. 505, AIR 1930 BOM 302 dissented from. [Para 8]
(3) Hindu Law – Partition - nature of the acquisition of right in property received on partition.
Where a female had a share in the joint property, and property was allotted to such person in the partition deed there is no acquisition of title by transfer. The person had a subsisting title to the totality of the property of the family. What the partition deed effected was to transform the joint title into separate titles of individual members of the family in respect of the several items of the property allotted to them respectively. AIR 1966 SC 432 & 1964 JLJ 544: relied on. [Para 10]
(4) Hindu Succession Act, 1956 - S. l4 - female entitled to a share in – partition - getting property on a partition - sub-section (2) does not apply – she becomes full owner - treating her share as in lieu of maintenance would make no difference.
On a partition of joint Hindu family between her son and his sons, the paternal grand mother was allotted certain properties and it was mentioned that they were for her maintenance. On her death it was contended that being only a life estate, the properties reverted to the members of the defunct joint Hindu family and wert not inherited by her heir.
Held: It is true that the terms of the partition deed proceeded on the footing that the paternal grand mother was entitled only to a maintenance and could only be a limited owner in respect of the property given to her for that purpose. But as she was entitled to a share in the partition, then, while making an allotment out of the joint property, whether she was treated as entitled to a share or as only entitled to maintenance can make no difference to the legal position that the source or foundation to the right to the property allotted was a right to get a share in the partition and not the partition deed. She did not acquire the property by the partition deed. That being so the provisions of sub-section (2) if section 14 of the Act do not apply, and the provisions of sub-section (1) and the Explanation thereto fully come into operation. [Para 10]
(5) Contract Act, 1872 - S. 124 - contract of - indemnity liability when arises.
In the case of contract of indemnity, the indemnifier cannot be called on to make good his promise until the indemnified has incurred actual loss. 20 MPLC 400=AIR 1935 Nag. 147 relied on. [Para 11]
(6) Wealth Tax Act, 1957 - Ss. 3 and 2 (m) - debts to be deducted form computation of net wealth - contingent liability not to be deducted.
Under section 3 of the wealth tax Act, b57, all debts owed by the assessee on the valuation date other than the debts enumerated in section 2 (m), are to be deducted in computation of the net wealth. Compensation amount received after executing indemnity bond is not a loan on account of the Indemnity bond and cannot be excluded as a liability in the computation of the net wealth. [Para 11]
Dixit, C.J.
1. This is a reference under section 27 (1) of the Wealth-Tax Act, 1957, at the instance of the assessee, Seth Narsinghdas Kanhaiyalal of Jabalpur. The Appellate Tribunal has posed before us the following question:-
"Whether on the facts and in the circumstance of the cast",
(a) the value of the properties left by the assessee's mother and which properties were given to her under the registered partition deed dated 4-10-1955 executed by and between the members of the assessee H.U.P., and
(b) the amount of Rs.1,56,471 received by the assessee from the Government in pan payment of the compensation in respect of the land and properties acquired by the Government, have been rightly included in the net wealth of the assessee?"
2. The material facts are that at the time of a partition effected between the assessee, his wife and his two sons by a registered deed dated the 3rd October 1955, Smt. Ramkunwarbai, the assessee's mother, was given one-thousand shares of the Perfect-Potteries Co. Ltd. Jabalpur, and some land situated in Mankhedi, Tahsil Patan, District Jabalpur, for her maintenance. The material portion of the partition-deed dealing with this matter ran as follows:-
"I am a Marwadi Vaish following Vallabh Kui Sanuday Principles. I am governed by the Mitakshara Act which is applicable to Hindus of our Community. Hence, I am responsible for looking after my mother alone during her life-time about which I have always been vigilant. Therefore, I have transferred 1000 preference shares of the Perfect Pottery Co. Ltd., Jabalpur, in her name at the time of partition of the movable property with her consent and now by virtue of this agreement I further give her the land measuring 102.39 acres in village Mankhedi, Tahsil Patan, District Jabalpur the yearly rent of which is Rs.150. She may utilise Income of these properties given to her for her maintenance during her lifetime or may give away for the religious cause as she may desire. During her lifetime no co-sharers will have any kind of right or connection whatsoever on these properties given to her by me.
I feel these properties given to my respected mother is reasonable according to the standard of living and dignity of our family and I am confident no co-sharer will have any sort of objection in this regard."
The value of these one-thousand shares used to be included in the computation of net wealth of Smt. Ramkunwarbai for purposes of wealth-tax assessment. After her death on 20th October 1960, the Wealth Tax Officer included the value of these shares in the net wealth of the assessee, Seth Narsinghdas Kanhaiyalal, for assessment of wealth-tax in respect of the assessment year 1962-63, the valuation date being 27th July 1961. The Wealth Tax Officer rejected the contention of the assessee that the properties, which were given to Smt. Ramkunwarbai at the time of partition, having been given to her only for the purposes of her maintenance reverted back to the defunct Hindu Undivided Family of the assessee his wife and sons, and not to the assessee Seth Narsinghdas in his individual capacity, and therefore, the value of the shares could nut be included in the net wealth of the assessee. The contention was rejected by the Appellate Assistant Commissioner of Wealth-tax and the Appellate Tribunal also in the appeals preferred by the assessee.
3. In 1942 certain properties belonging to the assessee were first requisitioned by the Government. They were later on acquired in 1956 under the Requisitioning and Acquisition of Immovable Property Act, 1952, and the rules framed thereunder. The assessee made a claim that as he was the owner of the property the Government should pay him compensation of Rs.13,62,536 in respect of the property acquired. By an agreement dated the 4th July 1960, concluded between the assessee and the Government, the assessee was paid Rs.1,56,47 "as compensation for the said property pending agreement as to, or determination of, the amount payable as compe
