SURJIT LAL CHHABDA versus COMMISSIONER OF INCOME TAX, BOMBAY

Citation: [1976] 2 S.C.R. 164 · Decided: 06-10-1975 · Supreme Court of India · Bench: Y.V. CHANDRACHUD · Disposal: Dismissed

Cited by 3 judgment(s) · cites 1 · see the full citation network in Lexace

Judgment (excerpt)

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164 
SURJIT LAL CHHABDA 
v. 
COMMISSIONER OF INCOME TAX, BOMBAY 
October 6. 1975 
(Y. V. Cl!ANDRACHUD, R. S. SARKARIA AND A. C. GUPTA, JJ .] 
Income Tax Ac/9 1922-Section 2(9)-Hindu Undh·id,ed 
Family as an 
assessee-eoparcenary and Hindu Undivided Fami/1-In the absence of a nucleus 
whether H.U.F. can consist of one male men'/iber-Presun1ption of Union of a 
lli,.du family-Composition of 'H.U..F. whether relevant for assessment in case 
where property belong to subsisting undivided family gr in case where property 
is 'thrown into common hotchpotch for the· first -time-lVhether asseBSn1ent to 
be 1nade depending on the nature and character of the prlJperty ·under the 
personal law. 
The appellant Surjit Lal Was the owner of an immov~ble property called 
"'Kathoke Lodge·~ · He used to derive rent income from the said property in 
addition to deriving income under other heads. In 1956, he made a declaration 
throwing the said property into the family hotcbpot. The family consisted of 
himself his wife and an unmarried daughter. 
The appellant contended before the Income Tax Officer that the rent income 
derived from the said property should be assessed in the status of a Hindu 
Undivided Family. The Income Tax Officerheld : 
1. In the absence of a nucleus of,joint family propert}' th.ere was nctbing 
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with which the appellant c·ould mingle his separate property. 
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2. There could not be a HindU Undivided f3.mily v;ithout there being 
Undivided family property. 
An· aPpeal filed before the Appellate Assistant Commissio::ier wa'i dismissed 
but on the following grounds : 
( 1) After the declaration the appellant was dealing v.·ith the income of 
the property in the ~ame way as before and. therefore, the declaration 
was not acied upan. 
(2) Even assuming that the property was thrown into the common stock 
and was therefore joint family property. 
the income from 
that 
property could still be taxed in the appellant's hands as he was the 
sole male member of the family. 
- The ma:tter was further taken to the Income Tax Appellate Tribunal by 
the appellant. The ·Tribunal accepted the declaration as genuine and differed 
from the A.A.C. that it was not acted upon. The Tribunal, however, held -that 
though the appella:nt had invested his separate property ,,·ith the character of 
joint family property, he being a sole surviving coparcener continued to have 
the same absolute and unrestricted interest in the propert}' as before and, 
therefore, in law, the property had to be treated' as his separate property. 
Thereafter. the Tribunal ieferred the question of law to the High Court. 
Before the High Court it was contended by the appellant that it is open to a 
male member of a joint Hindu Family to convert his 5elf-acquired property into 
joint family property by throwing it into· the common botch pot, and that it 
was not necessary that there should· be an ancestral nucleus or that there 
should he mo"re than one male in the joint family. On the other h:lnd, the 
department contended that it was contrary to the basic concept of a Hindu. 
undivided family that a single male alongwith females could form a joint Hindu 
family and that it was necessary for the formation of. a joint Hindu family 
that there should be more than one male entitled to claim partition of the joint 
family property. 
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S. L· CHHABDA v. C.l.T. 
165 
The High Court did not go into the larger question and assumed for the 
purpose of a.rgument that there need not be more than one male . member for 
forming a joint Hindu family as a taxable unit. 
The High Court held that 
since the assessee ha,d no son, there wa·3 no undivided family. 
According to 
the High Court, the case of the appellant fell within the ratio laid down by 
the Privy Council in Kalyanji's case and that since under the personal law, 
the right to the income remained as it was before the appellant made the 
declaration, the income from Kathoke Lodge was !ia!>le to be assessed as the 
appellant's individu.al in:ome. 
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Dismissing an appeal by Special Leave, 
HELD : 
(1) Even in the absence of an antecedent history of jointness, the appellant 
could constitute a joint Hindu Family with his wife and unmarried daughter. 
True th&t the appellant could not constitute a coparcen~ry with . h!s wife ~nd 
unmarried daughter but under the Income Tax Act a Hmdu undivided famtly, 
not a coparcenary is taxable unit. A Hindu .:oparcenary is a m

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