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Seth Mathuradas v. Commissioner Of Income Tax, Madhya Pradesh And Bhopal, Nagpur .
Factual and Procedural Background
These cross-appeals originate from two judgments of the High Court of Madhya Pradesh (Nagpur Bench) concerning income-tax assessments of a Hindu Undivided Family (HUF) headed by Mathura Das.
- Civil Appeal No. 139 of 1956 (Assessee’s appeal) covers Assessment Years 1944-45 to 1947-48. The karta claimed that a disruption of the HUF occurred pursuant to a partition dated 16 October 1944 (deed executed 30 December 1944 and registered 2 January 1945). Relief under Sections 25-A and 25(4) of the Income-tax Act was sought. The Income-tax Officer, Appellate Assistant Commissioner, and Income-tax Appellate Tribunal all rejected the claim, finding the partition inauthentic and not acted upon. The High Court, on reference, upheld that view. The assessee appealed to the Supreme Court.
- Civil Appeal No. 207 of 1959 (Commissioner’s appeal) concerns Assessment Years 1948-49 and 1949-50. On 6 May 1950, Mathura Das filed a civil suit; the civil court declared the deed of 30 December 1944 genuine and held that the joint family had ceased to exist from that date. An application under Section 25-A was again rejected by the Income-tax Officer, but the Appellate Tribunal accepted the claim (except as to one house). The Commissioner’s application for reference under Section 66(1) was refused; under Section 66(2) the High Court directed a reference and answered it in favour of the assessee. The Commissioner appealed to the Supreme Court.
Legal Issues Presented
- Whether there was any legal evidence to sustain the Tribunal’s finding that the alleged partition of 16 October 1944 was not genuine and had not been acted upon (C.A. 139/1956).
- Whether there was any legal evidence to sustain the Tribunal’s finding that the partition of 30 December 1944 was genuine and effective (C.A. 207/1959).
Arguments of the Parties
Assessee (C.A. 139/1956)
- Contended that the family had in fact been disrupted by a valid partition on 16 October 1944 and was entitled to the benefits under Sections 25-A and 25(4) of the Income-tax Act.
Commissioner of Income Tax (C.A. 207/1959)
- Argued that the partition relied on for 1948-49 and 1949-50 was “really the same partition” previously rejected, that no fresh material existed to establish its genuineness, and that a partition earlier held inauthentic could not later be treated as ratified.
Table of Precedents Cited
No precedents were cited in the provided opinion.
Court's Reasoning and Analysis
Civil Appeal No. 139 of 1956: The Supreme Court observed that the Tribunal had, on the evidence before it, found the alleged partition to be non-genuine and unimplemented. That finding was purely one of fact. Consequently, “no question of law arises”; the High Court was correct in affirming the assessment. The appeal therefore failed.
Civil Appeal No. 207 of 1959: The Court noted that the partition relied upon here was dated 30 December 1944, not 16 October 1944. Additional evidence— including sworn statements by the sons of the assessee and other relevant material— had been placed before the Tribunal. The High Court concluded that this constituted adequate material to support the Tribunal’s finding of genuineness. The Supreme Court agreed, holding that it could not be said there was “no material” for the finding. The Commissioner’s challenge was accordingly rejected.
Holding and Implications
Both appeals are DISMISSED WITH COSTS.
Immediate consequence: the assessments stand as determined— the assessee’s claim for partition relief for 1944-45 to 1947-48 is finally rejected, while the Tribunal’s acceptance of partition for 1948-49 and 1949-50 is upheld. The judgment turns on sufficiency of evidence and does not purport to establish a new legal principle.
Kapur, J.— These are two cross-appeals which arise out of two orders and judgments of the High Court of Madhya Pradesh at Nagpur. The appellant in Civil Appeal No. 139 of 1956 is the assessee and that in Civil Appeal No. 207 of 1959 is the Commissioner of Income Tax.
2. The facts of the case are these. Civil Appeal No. 139 of 1956 relates to Assessment Years 1944-45, 1945-46, 1946-47 and 1947-48 and Civil Appeal No. 207 of 1959 relates to Assessment Years 1948-49 and 1949-50. The accounting years in both the appeals were Samvat years. The appellant in CA 139 of 1956 was the karta of a Hindu Undivided Family which consisted of the appellant, his wife and three sons. The family owned and possessed various movable and immoveable properties and businesses and were being assessed as a Hindu Undivided Family. The appellant as the karta of the family brought about a disruption of the Hindu Undivided Family. There was a partition on October 16, 1944 and the deed of partition was executed on December 30, 1944, and was registered on January 2, 1945. The appellant claimed that the partition was given full effect to and therefore the members of the disrupted family applied under Section 25-A and Section 25(4) of the Income Tax Act claiming exemption and reduction of tax liability for the various years of assessment and also prayed for an order under Section 25-A. The Income Tax Officer rejected the application holding that there was no partition as alleged by the appellant and that the deed of partition was not meant to be acted upon. The appellant then went in appeal to the Appellate Assistant Commissioner which was dismissed and so was the appeal to the Tribunal. The appellant applied under Section 66(1) for a reference to the High Court on five questions of law but this application was also dismissed. Thereafter he applied to the High Court under Section 66(2) of the Income Tax Act and the High Court directed the Tribunal to state the case on the following question:
“Whether there is in this case any legal evidence to support the inference of the Tribunal that the partition in question was not genuine and meant to be acted upon.”
“The partition in question” which was set up was one dated October 16, 1944. The case was stated but the reference was decided against the appellant. Against that order the appellant has come to this court on a certificate of the High Court. In our opinion no question of law arises in this appeal. It was held by the Tribunal, on the material before it, that the partition which was evidenced by the deed was not genuine and the partition was not acted upon. In our opinion the High Court, on this finding, rightly held against the appellant. The appeal is therefore dismissed with costs.
3. Civil Appeal No. 207 of 1959 is equally without substance and must be dismissed. As has been said above, that appeal relates to Assessment Years 1948-49 and 1949-50. On May 6, 1950, respondent Mathura Das filed a civil suit praying that the partition as evidenced by the deed dated December 30, 1944, be declared null and void and a fresh partition be made between the parties. Union of India was sought to be made a party to the suit but on its objection the court refused this prayer. The court held the partition evidenced by the deed of partition to be genuine, fair and binding on all the parties and that the joint family had ceased to exist as from December 30, 1944. Once again respondent Mathura Das applied under Section 25-A of the Income Tax Act but this application was also dismissed. On appeal to the Appellate Tribunal, it was decided in favour of Mathura Das respondent excepting in regard to a house at Bikaner. The Commissioner of Income Tax applied for a reference under Section 66(1) of the Income Tax Act but it was rejected. The Commissioner then applied to the High Court under Section 66(2) of the Act and the High Court ordered a reference to be made but answered the question referred in favour of the respondent and against the Commissioner. The question referred was:
“Whether there was any legal evidence before the Tribunal for the finding that a partition was effected in 1944 and it was genuine.”
It is against this judgment and order that the Commissioner has come in appeal to this court. Considering the additional facts which were placed before the Tribunal and on which it had given a finding in favour of the respondent Mathura Das, the High Court held that there was material in favour of the partition set up. It was argued before us that it was really the same partition and there was nothing fresh to support the genuineness of the partition and that the partition which had been held not to be genuine cannot now be held ratified. But the partition set up in this case was of December 30, 1944, whereas the partition set up in the earlier case was of October 16, 1944. As the High Court has pointed out on the additional facts which were proved before the Tribunal including the statements on oath of the sons of the respondent and the other relevant material it cannot be said that there were no materials before the Appellate Tribunal for finding in favour of the respondent and in favour of the partition being genuine. The decision of the High Court was right and this appeal must also fail and is dismissed with costs.
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