COMMISSIONER OF WEALTH TAX Vs. P M PADMANABHAN

JUDGEMENT

(1.) AT the instance of the Commissioner of Wealth-tax (Revenue), the Income-tax Appellate Tribunal has referred the following two questions of law, for the decision of this court:

(2.) THE respondent is an assessee to wealth-tax. We are concerned with the assessment years 1977-78 and 1978-79. THE respective valuation dates are March 31, 1977, and March 31, 1978. THE main objection to the assessments is regarding the status and the inclusion of the entire property in the wealth-tax assessments. THE Wealth-tax Officer assessed the respondent as an individual He rejected the plea of the assessee that the Hindu undivided family in which status the assessee was assessed till then had become statutorily extinct with effect from December 1, 1976, by the operation of the Kerala Joint Hindu Family System (Abolition) Act, 1975. Even though the Wealth-tax Officer assigned the status of the assessee as an "individual", he included in the assessments the entire assets which originally belonged to the Hindu undivided family. In appeal, the Appellate Assistant Commissioner held that in view of the Kerala Act (Kerala Joint Hindu Family System (Abolition) Act, 1975), only the presumptive share of the assessee in the properties can be assessed in his hands. THE Appellate Tribunal concurred with this view. THEreafter, at the instance of the Revenue, the Appellate Tribunal has referred the two questions of law, formulated hereinabove, for the decision of this court.

(3.) MR.P. K. R. Menon, counsel for the Revenue, attacked the reasoning and conclusion of the Tribunal to hold that the assessee's wife will be entitled to a share in the estate and so only the presumptive share of the assessee in the properties can be included in the wealth-tax assessments. It was argued that the assessee is a Hindu, governed by the Hindu Mitakshara law in South India and in South India the practice of allotting a share to females on partition had become obsolete long ago. The decision relied on by the Appellate Tribunal will not apply to the instant case, Saraswathi Ammal v. Anantha Shenai [1966] AIR 1966 Ker 66 ; [1965] KLT 141. It related to the right of a Hindu female member of a joint family in the erstwhile Cochin State wherein the Hindu law applicable was different. Counsel for the assessee, MR. Davis, argued that the effect of the Kerala Joint Hindu Family System (Abolition) Act, 1975, is to make a statutory extinction of the joint family and to result in a situation wherein the members will hold the properties only as tenants-in-common. Since the assessee's wife is a member of the Hindu undivided family, on extinction of the joint family, it should be deemed that she also obtained a share in the joint family properties and so in the assessments of the assessee in this case, only his presumptive share can be brought to tax. Incidentally, MR. Davis also mentioned that there are other male members in the family besides the assessee and that aspect has not been reckoned with by the authorities.