Seth Mathuradas vs Commissioner Of Income-Tax, Madhya...
Rewritten Version Notice: This is a rewritten version of the original judgment.
Court: Supreme Court of India
Case Number: Not extracted
Decision Date: 22 November, 1960
Coram: J.C. Shah, J.L. Kapur, M. Hidayatullah
In this matter the Supreme Court considered two cross‑appeals that originated from separate orders and judgments issued by the High Court of Madhya Pradesh at Nagpur. The first appeal, designated as Civil Appeal No 139 of 1956, was brought by the assessee, while the second appeal, Civil Appeal No 207 of 1959, was filed by the Commissioner of Income‑Tax. The factual background involved assessment years spanning the mid‑1940s. Specifically, Civil Appeal No 139 of 1956 concerned the assessment years 1944‑45, 1945‑46, 1946‑47 and 1947‑48, whereas Civil Appeal No 207 of 1959 related to the assessment years 1948‑49 and 1949‑50. For both appeals the accounting periods were expressed in Samvat years.
The appellant in the first appeal was the karta of a Hindu undivided family that comprised himself, his wife and three sons. The family owned a variety of movable and immovable assets together with a business, and it had been assessed as a Hindu undivided family for income‑tax purposes. Acting in his capacity as karta, the appellant effected a distribution of the family property. A partition of the family was effected on 16 October 1944; the deed of partition was executed on 30 December 1944 and subsequently registered on 2 January 1945. The appellant asserted that the partition had been fully implemented and consequently sought relief under section 25A and section 25(4) of the Income‑Tax Act. He claimed that the members of the now‑disrupted family were entitled to exemption and reduction of tax liability for the various assessment years and also prayed for an order under section 25A.
The Income‑Tax Officer rejected the appellant’s application, finding that no genuine partition had occurred as alleged and that the deed of partition was not intended to be acted upon. The appellant appealed this decision to the Appellate Assistant Commissioner, whose dismissal was affirmed by the Tribunal. Pursuing further remedy, the appellant invoked section 66(1) of the Act, seeking a reference of five questions of law to the High Court; that application was likewise dismissed. Subsequently, the appellant filed an application under section 66(2) of the Act, requesting that the High Court direct the Tribunal to state the case on a specific legal issue. The High Court ordered the Tribunal to consider the 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 at issue was the one dated 16 October 1944. The Tribunal, after examining the material before it, concluded that the partition had not been acted upon, and the High Court, acting on that finding, decided against the appellant. The appellant then obtained a certificate from the High Court and brought the matter before this Court. The Court observed that no pure question of law arose for determination in this appeal. The Tribunal’s finding that the partition was not operative was based on the evidence before it, and the High Court’s adoption of that finding was appropriate.
The Court observed that the finding of the Tribunal, which concluded that the partition had not been genuinely effected, was correctly applied to the appellant. Accordingly, the appeal was dismissed and the appellant was ordered to bear the costs of the proceedings. The Court also considered Civil Appeal No 207 of 1959 and held that it was wholly without merit. As noted earlier, that appeal concerned the assessment years 1948‑49 and 1949‑50. On 6 May 1950 the respondents, identified as Mathuradas, instituted a civil suit seeking a declaration that the partition evidenced by the deed dated 30 December 1944 should be declared null and void and that a fresh partition be effected between the parties. The respondents also requested that the Union of India be joined as a party to the suit; however, the court refused this request after the Union objected. The trial court thereafter held that the partition evidenced by the deed of 30 December 1944 was genuine, fair and binding upon all the parties and that the joint family ceased to exist from that date. This finding formed the backdrop for the subsequent tax proceedings.
The respondent, Mathuradas, subsequently filed an application under section 25A of the Income‑Tax Act, which was also dismissed. Upon appeal to the Appellate Tribunal, the Tribunal decided in favour of the respondents except with respect to a house situated in Bikaner. The Commissioner of Income‑Tax then sought a reference under section 66(1) of the Act, but the request was rejected. Thereafter the Commissioner applied to the High Court under section 66(2); the High Court ordered that a reference be made to the Tribunal and answered the question in favour of the respondent and against the Commissioner. The specific question referred was whether any legal evidence existed before the Tribunal to support the finding that the partition effected in 1944 was genuine. The Commissioner appealed this judgment and order to this Court. In reviewing the additional material placed before the Tribunal, the High Court concluded that there was sufficient evidence to support the genuineness of the partition dated 30 December 1944. It was contended before us that the same partition had already been held not genuine and that no fresh evidence existed to alter that conclusion. However, the partition in the present proceedings dated 30 December 1944 differed from the earlier partition dated 16 October 1944. The High Court highlighted additional evidence, including sworn statements of the respondent’s sons, demonstrating that material existed for the Tribunal to find the partition genuine. The Court therefore affirmed that the High Court’s decision was correct and dismissed the appeal with costs. The appeal is hereby dismissed.