C.I.T. BIHAR & ORISSA, PATNA versus MAHARAJ KUMAR KAML SINGH

Citation: [1973] 3 S.C.R. 522 · Decided: 13-02-1973 · Supreme Court of India · Bench: K.S. HEGDE · Disposal: Appeal(s) allowed

Judgment (excerpt)

522 
C.I.T. BIHAR & ORISSA, PATNA 
v. 
MAHARAJ KUMAR KAML SINGH 
February 13, 1973 
[K. S. HEGDE, P. JAGANMOHAN REDDY AND H. R. KHANNA, JJ.] 
Indian Income-Tax Act, 1922, ss. 16(3)(a) (a)(iii), 9(4)(a)-Hol4er 
of impartible estate, transferring properties of estate to his wife-fnc()me 
from properties whether liable to be included in i11come 
of assessee-
Fiction created by s. 9 ( 4 )(a) re11ders 
assessee 
liable under s. 16( 3) 
(a)(iii). 
The assessee-respondent is the bolder of an impartible estate. By an 
iodonture dated 23rd November, 1963, he granted to his wife two premises 
fer life by way of supplementary maintenance grant. If was a direct trans-
fer which was admittedly not effected for any consideration or in connec-
. ticiQ with the agreement to live apart. 
During the 
assessment 
yean 
1957-58 to 196G-61, the income from these house properties was included 
in the total income of the assessee under section 16(3) (a) (iii) o'f the Act 
At the instance of the assessee the matter was referred to the High Court. 
Two questions fell for consideration before the High Court, namely, (i) 
whether the Tribunal was justified in 
holding that the provisions 
of 
s. 16(3) (1) (iii) applied to the income arising from the property; and 
(ii) ·whether the Tribunal was right in holding that the income under the 
said provisions was to be included in the total income for the purpose oi 
computing the net annual value of the residential house. under the first 
proviso of s. 9(2). The High Court answered the first of the two ques-
tions in favour of the assessee and. therefore, did nc;t think it necessary 
to go into the other question.. On appeal by certificate to this Court, the 
material question was whether thl! income 
from the house 
properties 
transferred by the assessee was liable to be included the income of 
the 
assessee. 
HELD : (i) The incident of impartible estate have been well settled 
by the decisions of the Courts i11 this country as well. as by the decisions of 
the judicial committee. 
The holder of an impartible estate has uncon-
trolled power of enjoyment and disposal of the impartible estate as well as 
the income arising therefrom; yet the estate belongs to the Hindu joint 
family of which the holuer is a member. 
Subject to any custom to the 
contrary, on the death of the holder of an impartible estate, the estate de-
volves by survivorship. 
[524G-H] 
Baijnath Prasad Singh and Ors. v. Tej Bali, L.R. 48 I.A. 195, Shiba 
Prcsad Singh v. Rani Prayad Kumari Devi & Ors., L.R. 59 I. A. 331 and 
Commissioner of /ncome-ll/Jc, Punjab. North-West Frontier and Delhi Pro-
vinces, Lahore v. Dewan Bahadur Dewan Krishna Kishore, Rrds, Lahore. 
68 I.A. 155, referred to. 
Cii) After s. 9 was amended by incorporating s. 9( 4). the income of 
house property owned by the ho1der of an impartible estate has to be 
considered as his individual income. 
From this it follows that had the 
assessee not transferred the ?remises in question in favour of his wife, 
the income from those premises would have been considered as his indi-
vidual income under section 9. 
The contention that s. 9(4) (a)' raises a 
legal fiction which is limited for the purpose of s. 9 is fallacious. Section 
~deals with onlv one head of income. Section 9(4)(a) speaks for 
th~ 
purpose of this Secticn'' whkh really mea:ns for the purpose of deter-
A 
B 
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D 
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C.I.T. v. M. K. K. SINGH (Hegde, }.) 
523 
mining tho! taxable income of the assessee. 
An assessee is not ~epara1el_y 
taxed under each Jlead of income. Hence when a source of lDCOmc 11 
transferred from assessee to his wife excepting for the two purposes men• 
tioned in s. 16(3) (a) (ii), income from that purpose has to be considered 
as the income of the assessee because of asset of the assessee stand~ trans· 
Jerred to his wife. 
Such. a conclusion docs not amount to cxtendmg the 
fiction cr.:ated under s. 9 beyond the purpose for which it is created. It 
merely gives etl"ect tc that fiction. It is true that a legal fiction may not 
he extended beyond the purpose for which it is created but that does not 
mean that the Court should not give effect to that fiction. 
[S26H to 
527D] 
Section 27(ii) of the Income-tax Act, 1961 which has taken place of 
s. 9(4) of the Act makes explicit that was implicit in the provision, es it 
originally stood. 
[527D-E) 
(iii) lt follows as necessary corollary that the annual value of the 
as~essee's residential house has to be co

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