PRITHVI SINGH Vs. COMMISSIONER OF WEALTH TAX ADDL

JUDGEMENT

(1.) THIS is a reference made by the Income-tax Appellate Tribunal, Jaipur Bench, Jaipur, by which the following question of law arising out of the order of the aforesaid Tribunal dated February 22, 1974, has been referred to this court :

(2.) THE facts and circumstances in which this reference arises may be briefly stated. THE respondent, Prithvi Singh, who will hereinafter be referred to as "the assessee", was the holder of an impartible estate known as the jagir of Bisalpur, situated in district Pali in the State of Rajasthan, THE jagir was said to have been granted to the forefathers of the assessee more than 300 years ago and succession to the jagir was governed by the rule of primogeniture. Thus, the jagir was ancestral and passed by succession to the senior member in the main line of the original grantees. THE jagir of Bisalpur was resumed in the year 1954 by the State of Rajasthan, under the provisions of the Rajasthan Land Reforms & Resumption of Jagirs Act, 1952. THE assessee was given compensation in lieu of resumption of his jagir in the form of jagir bonds in the year 1963-64. THE compensation bonds were sold by the assessee for a sum of Rs. 2,05,728.76. On November 4, 1964, the aforesaid amount was partitioned by the assessee in four equal shares between himself, his Wife and two minor sons so that each one of them got Rs. 51,432.19.

(3.) THE law on the subject is well settled that the jagir though impartible was not an absolute property of the jagirdar but it belonged to his Hindu undivided family. It has been held by this court in Thakur Gopal Singh v. CWT [1975] 99 ITR 354, that the compensation payable under the Rajasthan Land Reforms and Resumption of Jagirs Act, 1952, was also joint family property and was not the self-acquired or separate property of the ex-jagirdar. It was also held in the aforesaid case that the compensation awarded on the resumption of the jagir to the ex-jagirdar or the market price of the compensation on the date of valuation could be assessed for wealth-tax purposes only as that of a Hindu undivided family because the character of the compensation received in lieu of jagir could not be different from that of the jagir itself. After the resumption of the jagir, the jagirdar was paid compensation in the form of jagir bonds. THE character of that property in the hands of the jagirdar would undoubtedly be impartible, as was the nature of the jagir, but it was open to the jagirdar and his heirs to renounce the character of impartibility. It was held in Chinnathayi v. Kulasekara Pandiya Naicker, AIR 1952 SC 29, that it was open to a member of a joint Hindu family owning an impartible estate to renounce his right of succession on behalf of himself and his heirs. THEir Lordships of the Supreme Court held in the aforesaid case that any such relinquishment must operate for the benefit of all the members of the joint Hindu family and the surrender must be in favour of all the branches oi the family. It may also be observed that in order to establish that an impartible estate had ceased to be joint family property for purposes of succession, it was necessary to prove an intention, express or implied, on the part of the junior members of the family to give up their chance of succeeding to the estate. Thus there must be clear intention to renounce or surrender any interest in the impartible estate or to a relinquishment of the right of succession and an intention to impress upon the impartible estate, the character of separate property.