COMMISSIONER OF INCOME-TAX, MADRAS versus M. K. STREMANN, MADRAS

Citation: [1965] 2 S.C.R. 106 · Decided: 09-11-1964 · Supreme Court of India · Bench: K. SUBBA RAO · Disposal: Dismissed

Judgment (excerpt)

106 
COMMISSIONER OF INCOME-TAX, MADRAS 
v. 
M. K. STREMANN, MADRAS 
November 9, 1964 
[K. SUBBA RAo, J.C. SHAH ANDS. M. SIKRI, JJ.] 
Income-tax Act, 1922 (11 of 1922)-Partition detd-Contairung reel" 
tal that self-acquired prop.,ty already blended with Joint Hindu family pro-
perty-Only evidence of blending whether sufficient to show paNition mlid 
to justify an order under s. 25A-Qr deed merely a transfer to minors under 
A 
B 
r. 16(3)(a)(iv). 
C 
For some years until 1952-53, the asses.see was assessed as an individual 
in respect of income from a house that was admittedly Joint Hindu family 
property and income from a selling agency. He maintained only one set 
of accounts for income from both these sources. On December 19, 1952, 
a deoo of partition was executed between the assessee and his three minor 
children, who were represented by their mother. In the course of assess-
ment proceedings for tho year 1953-54, the assessee claimed that an order 
D 
under s. 25A he passed and separate assessments made on each of the 
members of the erstwhile family as from December 19, 1952. 
The Income Tax Officer rejected this claim, holding that merely because 
the income from ancestral property and self acquired propeny was not 
•eparately accounted for, the latter did not become part and parcel of 
Joint family property; he further held that there was no partition by 
vinue of the deed, but simply a direct or indirect transfer made l>y the 
assessee of his own self-acquired property within the meaning of s. 
E 
16(3) (a) (iv). 
The Appellate Assistant Commissioner and tho Appellate Tribunal con-
firmed the \iew taken by tho Income-tax Officer, but, upon a reference 
made to it, the High Court held that the deed executed in December 
19, 1952, amounted to a valid partition and was not a transfer within the 
meaning of a. 16(3)(a)(iv). 
It was contended on behalf of Revenue that the only evidence that 
all assets and liabilities including the agency business were transferred to 
the ·joint Hindu family was a recital in the partition deed itself and there 
was no antecedent blending of the self-acquried property with ancestral 
property before it was partitioned among the parties. All the clauses of 
the deed took effect on the signature of the deed and no amount of 
time elapsed between the alleged blending and partition. 
HELD : From the time when instructions were given that the self -
acquired property was to be treated as joint family property in the deed 
to be executed, the propeny assumed the character of the Joint family 
property. On execution, the deed became evidence of a pre-existing fact, 
i.e of throwing a self-acquired property into the hotch-potch. [110 G] 
The High Coun was ri~t in holding that the partition proceeded on 
the basis that the self-acqmred property was made available for partition 
along with the only item of joint family property. That itself constituted 
proof that antecedent to the panition, however short 'the interval, there 
was blending of the self acquired property of the assessee with his ancestral 
joint family property. 
The result was that at least on December 19, 
1952, antecedent to the partition, tho properties became impressed with 
F 
G 
H 
• 
A 
C. I. T. V. STREMANN (Sikri, J.) 
107 
the character of joint family property. Thore was a partition on Decem-
ber 19, i952. 
Thereafter, the properties allotted to the shares of the 
as.sessee and his divided sons were held by them in severalty. [110 H; 
Ill A. C-DJ 
(ii) The partition deed did not amount to direct or indirect transfer 
to the minor children by the asseosee within s. 16(3) (a)(iv). 
C.J.T. Gujarat v. Keshav/al Lallubhai, [1965] ~ S.C.R. 99, followed. 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. l 105 of 
1963. 
Appeal by special leave from the judgment dated August 30, 
1960 of the Madras High Court in C. R. No. 49 of 1956. 
c 
K. N. Rajagopala Sastri and R. N. Sachthcy, for the appellant. 
D 
E 
F 
R. Ganapathy Iyer, for the respondent. 
A. V. Viswanatha Sastri, T. A. Ramachandran, J. B. Dada-
chanji, 0. C. Mathur and Ravinder Narain, for the intervener. 
The J udgrnent of the Court was delivered by 
Sikri, J. 
This is as appeal by special leave directed against 
the judgment of the Madras High Court answering a question 
referred to it by the Appellate Tribunal against the Revenue. The 
Appellate Tribunal had referred the following three questions : 
1. Whether there was material for the Tribunal to reach 
the 

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