COMMISSIONER OF WEALTH TAX ANDHRA PRADESH Vs. MUKUNDGIRJI

JUDGEMENT

(1.) The question of law referred in this case is :

(2.) The answer to this question depends upon the meaning and effect of s. 8 of the Hindu Succession Act, 1956. The assessee, Mukundgirji, belongs to a secular sect, viz., Dinggles Gosavees, governed by customary law relating to succession. According to this custom, each guru nominates his successor. The Guru is the head of the math and is the sole and absolute owner of all the properties belonging to the math. The assessees grandfather, Maheshgirji, who was the Guru in his lifetime, nominated by his will dated 20/11/1946, one of his grandsons, viz., Ghanshamgirji as his successor-Guru. Thereby he bypassed his son, Chaturgirji, who had three sons, viz., Chandrabhangirji, Mukundgirji and Ghanshamgirji, Maheshgirji died on 30/01/1949. His will was not probated. Chaturgirji filed a suit in the City Civil Court, Hyderabad, consisting the will and claiming the guruship in himself. A compromise was arrived at in this suit where under Ghanshamgirji renounced his guruship in favour of his father, Chaturgirji. Certain business assets and properties left by Maheshgirji were divided amongst Chaturgirji and his three sons on 31-10-1951. In respect of two business assets, a partnership was formed consisting of the father and three sons and the income from this firm was assessed individually in the hands of each of the partner. Chaturgirji died on 24/12/1956, intestate. The properties left by him were divided equally by his three sons. For wealth-tax purposes, the properties which devolved upon the assessee on the death of his father were assessed as his individual properties. But from the assessment year 1967-68 onward, the assessee did not include these properties in his individual wealth-tax return. Instead, he filed a separate return for these properties in the status of "Hindu undivided family" on the ground that the assets in question were ancestral properties which consisting of himself and his sons. The WTO did not accept this contention and included these properties also in the personal net wealth of the assessee. On appeal, the AAC accepted the assessees contention and deleted these properties from the personal wealth of the assessee. The appeal preferred by the Department to the Tribunal was dismissed where upon the Revenue applied for and obtained this reference under s. 27(1) of the W. T. Act.

(3.) Mr. M. Suryanarayan Murthy, the learned standing counsel for the Department, contended that inasmuch as the said properties devolved upon the assessee under s. 8 of the Hindu Succession Act, 1956, they constitute the absolute properties of the assessee in which his sons have no right by birth. Counsel contended that whatever may have been the position in Hindu law earlier to the enactment of the Hindu Succession Act, the situation has undergone a radical change with the enactment of the said legislation. Besides s. 8, the learned counsel relied upon ss.4, 9, 19 and 29 of the W. T. Act. On the other hand, it is contended by Mr. Y. V. Anjaneyulu, learned counsel for the assessee, that s. 8 deals only with the mode of devolution or transmission, as it may be called, of the properties of the deceased but does not concern itself with the character of the property in the hands of the recipient vis-a-vis his own sons. Counsel contended that there are no words in s. 8 or in any other provision of the Act to indicate the intention of Parliament to do away with the concept of Hindu law prevailing until then in that behalf, and that in the absence of any such clear manifestation it would be reasonable to interpret s. 8 consistent with the notions of Hindu law prevailing until then. Both the counsel relied upon decisions to which we shall refer at the appropriate stage.