National Law Institute University

Project Report-1.0
On:
HINDU GAINS OF LEARNING

Submitted to: Submitted by:

Mrs. Kavita Singh RITIK RATH
Associate Professor VI Trimester
Family Law 2018BALLB74

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 ACKNOWLEDGEMENT

We would like to express our special thanks of gratitude towards our teacher Mrs Kavita
Singh .who gave us this wonderful golden opportunity to make project on topic “HINDU
GAINS OF LEARNING”.and for helping us throughout the project, which also helped
us in doing a lot of research and we came to know about so many new things and we are
really thankful to them. Secondly, we would also like to thank our friends and partners
and NLIU data base and library who contributed a lot in finalizing this project within the
given time frame.

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 TABLE OF CONTENTS

Contents
ACKNOWLEDGEMENT ......................................................................................................... 2
TABLE OF CONTENTS ........................................................................................................... 3
REVIEW OF LITERATURE .................................................................................................... 5
Books referred: ....................................................................................................................... 5
Statutes-.................................................................................................................................. 5
STATEMENT OF PROBLEM .................................................................................................. 5
OBJECTIVE OF STUDY .......................................................................................................... 5
HYPOTHESIS – ........................................................................................................................ 5
RESEARCH QUESTION .......................................................................................................... 5
INTRODUCTION ..................................................................................................................... 6
MEANING OF GAINS OF LEARNING .................................................................................. 6
SIGNIFICANCE IN HINDU JOINT FAMILY ........................................................................ 7
REASON FOR CONFLICTING VIEWS ................................................................................. 8
CLASSICAL POSITION........................................................................................................... 8
JUDICIAL POSITION BEFORE 1930 ..................................................................................... 9
Before 1930, there were conflicting views which can be seen through the following decisions.
.................................................................................................................................................... 9
CASE ANALYSIS............................................................................................................... 10
Durvasula Gangadharudu v. Durvasula Narasammah and Ors.(1872) ............................ 10
Amar Nath And Gokulchand vs Hukam Chand Nathu Mal (1921)................................. 11
PASSING OF HINDU GAINS OF LEARNING ACT, 1930 ................................................. 12
FEATURES OF THE ACT ..................................................................................................... 12
JUDICIAL POSITION AFTER THE ACT ............................................................................. 13
Chandrakant Manilal Shah And Another Vs. Commissioner Of Income-Tax ................ 13
Facts: ............................................................................................................................... 13
Balbir Singh Uppal and Another Vs. Gurmeet Singh Uppal and Others(2012) .............. 14
Shri Raj Kumar Singh Hukam Chandji Vs. Commissioner of Income-tax, Madhya
Pradesh(1971) .................................................................................................................. 15
CRITICAL ANALYSIS .......................................................................................................... 16
CONCLUSION ........................................................................................................................ 17

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BIBLIOGRAPHY .................................................................................................................... 18
Books ................................................................................................................................... 18
Websites ............................................................................................................................... 18
Cases .................................................................................................................................... 18

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 REVIEW OF LITERATURE

Books referred:
• A Short Treatise on Hindu Law: As Administered in the Courts of British India By
Herbert Cowell- To find the prespective of colonial court on hindu gain of learning act
before and after the passing of act .

• A Manual of Hindu Law By Standish Grove Grady- To know the case law in hindu
gain of learning act and find how court interpreted it

• Mulla's Hindu Law, 15th edition, 2006- To know jurist view on hindu gain of learning
act .

Statutes-

Hindu gains of learning Act – To know how this act settled the ambiguity which was there in
Hindu society before passing of the act.

STATEMENT OF PROBLEM
Whether the hindu gain of learning act settled the ambiguity which was there before the passing
of the act and whether the act have some lacuna in it.

OBJECTIVE OF STUDY

To find judicial interpretation related to Hindu gain of learning act and what is the view of
courts in India and famous jurist . Also difference in approach in the courts of India and privy
courts while dealing with Hindu gain of learning act.

HYPOTHESIS –
The Hindu gains of learning act has solved most of the ambiguity in this area as the Britisher
drafted this act with a futuristic view .

RESEARCH QUESTION

1) Whether there are some lacuna in this act .

2) Whether there is a need of certain amendment in the Hindu gain of learning act

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 INTRODUCTION
Gains of learning or the acquisition of property by means of learning renders confusion with
“

regard to the Hindu Undivided Family which is a peculiar and general feature of Indian society.
Whether the property acquired because of the learning funded by and to the detriment of the
joint family funds accrues to the joint family property or the separate property of the coparcener
was much debated.

This confusion was sought to be solved by early classical texts and later through the
interpretation of such texts by the Courts. The position was not clear yet because of the presence
of a large number of texts with conflicting views and also different interpretations of the same
by the courts. This question affected a large number of people in enjoying the gains of their
learning or to gain the returns from their investment. This led to the passing of the Hindu Gains
of Learning Act, 1930.

The position became clear to a large extent as the gains of learning were declared as the
exclusive property of the acquirer. But still certain confusions loomed large which has been
seen through a few cases and decided by the courts by applying their discretion.

The features of this Act and their application has been seen along with its critical analysis.

MEANING OF GAINS OF LEARNING

Gains of Learning refer to a form of self-acquired property or the property acquired by using
one’s education or other learning method. In Hindu Law it is known as gains of learning or
gains of science, and also as vidyadhana in the ancient texts.

The term learning signifies education, whether elementary, technical, scientific, special or
general, and training of every kind which is usually intended to enable a person to pursue any
trade, industry, profession or a vocation in life. The term gains of learning means all
acquisitions of property made substantially by means of learning.

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 SIGNIFICANCE IN HINDU JOINT FAMILY

The Hindu Joint Family is a normal condition of the Hindu society consisting of all members
descended lineally from a common male ancestor together with their mothers, wives or widows
and unmarried daughters. It includes within itself a narrower body called Coparcenery
consisting of only male members (now daughters included with Hindu Succession
(Amendment Act), 2005).

The joint family property and joint family ancestral property is collectively or individually
called ‘coparcenery property’. The significant features of coparcenery property include:

1. Joint Possession by all coparceners who have collective title and collective possession
over it.
2. Limited powers of disposal by the coparceners.
3. Devolution by doctrine of survivorship upon the surviving coparceners.

The Coparcenery Property includes-

1. All ancestral property

2. Property acquired with the aid or assistance of ancestral property ( Doctrine of
Accretion)
3. Property acquired at the cost of ancestral property (Doctrine of Detriment).
4. Property which is separate of a coparcener but which is voluntarily thrown by him into
the common stock to such an extent that it cannot be distinguished from joint family
property ( Doctrine of Blending).

In contrast to the coparcenery property is the ‘Self-Acquired Property’ which a person owns
exclusively and enjoys absolute power of disposal over it. It is his ‘Separate Property.’ This
property devolves by way of law of inheritance or testamentary succession. A coparcener can
hold even self-acquired property apart from the coparcenery property owned jointly by all the
coparceners. It includes property acquired by way of gift, or inheritance from a relative other
than father, father’s father or father’s father’s father (pre-1956).

The major conflict that had arisen with respect to the Gain of Learning as seen earlier was that
whether it fell under the category of “Coparcenery Property” or “Self-Acquired Property” and
whose incidental effects would naturally follow.

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 REASON FOR CONFLICTING VIEWS
The general rule as seen above is that ‘any property or income acquired with the aid of joint
family funds or with detriment to the joint family property would, in itself, become a joint
family property.’ But this rule seemed unjust where the income of the member of joint family
was considered as the joint family property by reason of it being acquired as a consequence of
the education (even primary and secondary) funded by the coparcenery property. The logic that
was applied was that since it led to the detriment of the coparcenry property, hence it should
form a part of it.

This interpretation created certain inequitable intricacies:

• It made a person incapable of having self-acquisitions through his own efforts, if

he was educated or trained or acquired a special skill that became the basis of his
employment or avocation with joint family funds.
• Moreover, the decision of funding the education, especially primary education, is
made by the father or family members of the child who has no authority to control
such decision. Putting a burden on the child later on to share his earnings out of his
efforts seems unjust in case where his consent to such sharing is absent.
• Also, this interpretation ignores the fact that in spite of getting similar education or
training, the ability to make money varies with each individual depending upon his
mental or physical capabilities and dedication and sincerity to work.

CLASSICAL POSITION
Even in the ancient times there are conflicting views with regard to the treatment of “Gains of
Learning” as a Separate Property or Coparcenery Property. While Narada expressly provided
that1:

“He who maintains the family of a brother while that brother was engaged in study, shall get a
share from the latter’s money that he makes with the help of this learning.

Some Shastric texts provided that what is acquired at the expense of the joint family funds
would be partible at the instance of the family members, while providing for distinction
between general and special learning.2

A different view altogether has been put forward in these words by Manu, Mayukha,
Jimutvahana:

“What a brother has acquired by his labour without using the patrimony, he need not give up
to co-heirs; nor what has been gained by science.”

1
Katayana cited in Mitakshara I, Vol iv, p. 8
2
Mitakshara I

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Also it has been given by Vyasa that “what a man gains by his own ability without relying on
the patrimony, he shall not give up to the co-heirs, nor what he gained by learning.”

JUDICIAL POSITION BEFORE 1930

Before 1930, there were conflicting views which can be seen through the following decisions.

It became the general principle that income earned by a member of a joint family by the practice
of a profession or occupation requiring a special training imparted at the expenses of the joint
family property was considered to be joint family property. If, however, such a person had
received only ordinary education suited to his position as a member of the joint family, gains
made by him without the aid of joint family funds were regarded as the self-acquired property
of such member.

The gains of learning has been held to be partible property in the case of a a dancing girl3, a
broker4, an army contractor5 and a mill manager.6
But there were also decisions holding such gains to be impartible for example in case of an
astrologer7 and an army contractor8. The grounds on which in the decision was based was the
slightness or the peculiar character of the education by which the science was acquired which
was in all these cases-“not to the detriment of the joint family property” and was acquired
through own talent and exertions. Still more striking is Laleshman Mayaram v. Jamnabai
(1882) I.L.R. 6 Bom. 225 where the family member was actually a Subordinate Judge. At the
family expense he had received a slight elementary education of an entirely non-professional
character. His law he had picked up for himself. His salary was held impartible, not because a
judge stands outside the rule but because in these matters a self-taught man has the best of it,
for gains are impartible which are not the result, directly or indirectly, of anything but his own
exertions.

3
Prime Minister (Luximon Row Sadasew v. Mullar Row Bajee (1831) 2 Khapp 60
4
Ghalakonda Alasani v. Chalakonda Ratnachalam (1864) 2 M.H.C.B. 56
5
Lachmin Kaur v Debi Prasad (1898) ILR 20 All 435
6
Jugmohan Das v Mangaldas (1886) ILR 10 Bom 528
7
Burga Bat Joahi v. Ganesh Dat Joshi (1910) I.L.K. 34 All. 305
8
Lachman Kuar v. Bebi Prasad (1897) I.L.R. 2 All 435

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 CASE ANALYSIS

Durvasula Gangadharudu v. Durvasula Narasammah and Ors.9(1872)

Facts:
This case came in appeal before the Madras High Court against the decision of Civil Judge of
Vizagapatam on the issue of whether the professional earnings of a Vakil were generally his
self-acquisition and impartible. The lower court held the acquisition out of professional
earnings to be impartible on the ground that the deceased brother- Latsanna received nothing
further than an ordinary general education from his parents; that he was not indebted in any
other way to the family means for his position, but on the contrary that by his management of
the family affairs he had been able in reality to increase the common stock, and had in no way
been a burden upon it.

Decision:
Kindersley, J gave the decision in favor of the appellant and held that the question must be
decided upon the facts in each case, how far the common family means were instrumental in
enabling the professional man to earn the property which is claimed as subject to partition.
Although it has been found that the deceased received from his father nothing more than a
general education but it does not appear that he was distinguished by his professional learning;
and it would be difficult to presume that a Vakil would probably be possessed of much learning
or skill.
The fair presumption would be that such attainments as the Vakil possessed had been acquired
with the assistance of the family means, and this presumption does not seem to be rebutted in
this case by evidence of the acquisition of such attainments without such assistance. He was,
therefore, of opinion that the professional earnings of the Vakil in the present case would be
subject to partition.

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Durvasula Gangadharudu v. Durvasula Narasammah and Ors. ( (1872) 7 Mad. H.C.R. 72

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Amar Nath And Gokulchand vs Hukam Chand Nathu Mal10 (1921)

Facts:
Joti Mal and his sons, of whom the appellant is one, constituted a joint Hindu family governed
by the Mitakshara law, which carried on a joint ancestral business as moneylenders at
Ferozepore, and the Hundis in question were given by this firm in the way of its business for
debts due to the plaintiffs, who were near relatives. In the conduct of this business the appellant
took no part. He was not privy to the debts inucurred. In his youth he was for seven years absent
from India for the purpose of being specially trained in England for the Indian Civil Service.
He succeeded in entering that service and, returning to India, was posted to the Central
Provinces. At the commencement of the suit he was Joint Magistrate at Sitarpur and in receipt
of the substantial emoluments of that office, but he had never severed himself from the joint
family of which he became a member at his birth.

Decision:
Sumner, J. held that the Personal earnings and acquisitions may remain partible throughout the
unsepa-rated member's life, if he was originally equipped for the calling or career, in which the
gains were made, by a special training at the expense of the patrimony. The persons qualified
for earning money by specialised education, enjoyed to the detriment of family funds, become,
as it were, a continuing investment for the family benefit.
Mr. Gokal Chand spent seven years in England acquiring that comprehensive and costly
education which qualified him to pass with success into this Service. The family being that of
hereditary moneylenders, the proficiency and the mentality formed as a result of Mr. Gokal
Chand's education was very different from that of other members of his family, and was a
specialised education.
The whole burden of proof was on Mr. Gokul Chand to give evidence to show that his
specialised education in England was obtained by the " presents of a friend, the charitable
benefactions or the educational foundations of strangers, or by his own self-taught efforts.” In
the absence of such evidence to the contrary the court held the property to be partible. The
court further laid down the principle that:
“Gains of this kind, which are impartible, are not gains of science as such, but gains of science
made without any detriment to the father's estate and acquired by the coparcener's exertions
independently of patrimonial help.”

10
Amar Nath And Gokulchand vs Hukam Chand Nathu Mal (1921) 23 BOMLR 671

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 PASSING OF HINDU GAINS OF LEARNING ACT, 1930

The Hindu Education Gain Bill was passed in 1898 in Madras Legislature which declared the
gains of learning by a Hindu to be his separate property. In the absence of any further steps,
this Bill failed. The confusion was sought to be ended again by the initiative of Sir Bhashyam
Iyengar, the Hindu Gains of Learning Bill was passed by the Madras Legislature again in 1901.
But it was vetoed by the Governor of Madras and so it could not be passed. Later in 1930 the
wave for bringing an end to the uncertainty and inequitable position rose again and led to the
passing of the Bill by the Central Legislature in 1930 and was sponsored by Dr. M R Jayakar.
The Act came into force on 25th July 1930.

FEATURES OF THE ACT

After 1930, the position is governed by the Hindu Gains of Learning Act, 1930. This Act has
removed the anomalies existing under the previous law, and it is now provided that
notwithstanding any custom, rule or interpretation of Hindu Law, gains of learning are to be
the exclusive and separate property of the member of the joint family who acquires them, even
if—

(a) His learning had been (in whole or in part) imparted to him by any member of his family,
or with the aid of the joint funds of the family, or with the aid of funds of any member of the
family; or

(b) He himself or his family had, while he was acquiring such learning, been maintained or
supported (wholly or in part) by the joint funds of the family, or by the funds of any member
of the family.

It is retrospective in operation, and all gains of learning whether made before or after the said
date, constitute the self-acquired property of the person acquiring them.

Moreover, under the said Act, the term “learning” is given a wide meaning to mean all types
of education, whether elementary, technical, scientific, special or general, and training of every
kind for pursuing any trade, industry, profession or avocation in life.

The ‘gains of learning’ includes all acquisitions of property, made substantially by means of
learning, whether such acquisitions be the ordinary or extraordinary results of such learning.
Thus the source of learning was made irrelevant.

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 JUDICIAL POSITION AFTER THE ACT
Chandrakant Manilal Shah And Another Vs. Commissioner Of Income-
Tax11(1992)

Facts:
Chandrakant Manilal Shah was the karta of a Hindu undivided family (HUF) and the family
was carrying on business in cloth. Naresh Chandrakant, one of the sons of the karta, joined
the business on a monthly salary of Rs. 100 since about April, 1959. With effect from
November 1, 1959, the business had been converted into a partnership between Chandrakant
Manilal Shah as karta of the Hindu undivided family and Naresh Chandrakant. The deed of
partnership executed in this behalf on November 12, 1959, indicated that Naresh
Chandrakant had been admitted as a working partner with effect from November 1, 1959,
having 35 per cent share in the profits and losses of the firm and the remaining 65 per cent
share was held by Chandrakant Manilal as the karta of the Hindu undivided family. An
application was made for registration of the firm which was dismissed by the Income-tax
Officer on the ground that there was no valid partnership. The view taken by the Income-tax
Officer was upheld in appeal by the Appellate Assistant Commissioner and Income-tax
Appellate tribunal.
The appeal to High Court raised the question that "Whether, on the facts and in the
circumstances of the case, there was a valid partnership between the two?" It has been urged
by learned counsel for the appellants that the mere fact that Naresh Chandrakant had neither
separated from the Hindu undivided family nor brought in any cash asset as his capital
contribution to the partnership but was contributing only his skill and labour could not, in
law, detract from a valid partnership being created.

Decision:
The court dealt with the question that whether skill and labour can be equated with property.
It reiterated the position with regards to gain of learning that at the detriment of the joint
family property was to be a part of joint family property before the commencement of the
Hindu Gains of Learning Act of 1930.
The definition of the term "learning" in the Act is very wide and almost encompasses within
its sweep every acquired capacity which enables the acquirer of the capacity "to pursue any
trade, industry, profession or avocation in life." It cannot be denied that skill and labour
involve as well as generate mental and physical capacity, varying from individual to
individual. It is by utilisation of this capacity that an object or goal is achieved by the person
possessing the capacity which is a benefit. This benefit accrues in favour of the individual
possessing and utilising the capacity which can be utilised even for the benefit of some other
individual.
When an individual contributes cash asset to become a partner in a partnership firm in
consideration of a share in the profits of the firm, such contribution helps and, at any rate, is
calculated to help the achievement of the purpose of the firm, namely, to earn profit. The
same purpose is, undoubtedly, achieved also when an individual in place of cash assets

11
Chandrakant Manilal Shah And Another Vs. Commissioner Of Income-Tax AIR1992SC66

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contributes his skill and labour in consideration of a share in the profits of the firm. Skill and
labour are by themselves possessions. Therefore, the mental and physical capacity generated
by skill and labour of an individual and indeed the skill and labour by themselves would be
the property of the individual possessing them. They are certainly assets of that individual
and there seems to be no reason why they cannot be contributed as a consideration for
earning profit in the business of a partnership firm. They certainly are not the properties of
the Hindu undivided family but are the separate properties of the individual concerned. The
partnership was therefore held to be valid.

Balbir Singh Uppal and Another Vs. Gurmeet Singh Uppal and Others12(2012)

Facts:
Late Hakim Dewan Singh Uppal was residing in an area which is now Pakistan and owned
ancestral properties there. On his retirement from government service in the year 1934, Dewan
Singh, who had knowledge about herbal medicine started practicing as a Hakim. As the practice
expanded, Arjan Singh, the defendant started assisting him. On partition of the country in the
year 1947, Dewan Singh migrated to India and settled in Delhi and expired on 11.05.1955.
Sometime before his death, Dewan Singh had gifted a sum between Rs.10,000/- to Rs.15,000/-
to Arjan Singh for setting up the family business i.e. of Hakim as also for purchasing some
properties. Utilizing a part of the said sum, he started the family business of Hakim under the
name and style of ‘M/s Sewak Pharmacy’ and was assisted by his younger brother Amar Singh.

The business of Hakim carried on by Arjan Singh flourished and yielded good income and in
due course of time the plaintiffs also joined the said family business. Between the years 1969
to 2005 Arjan Singh acquired other properties from the income derived by him from the
aforesaid family business and the compensation received by him from the ancestral properties
left behind in Pakistan.

The question was that whether it could be said that income earned by Arjan Singh from the
business of Hakim was joint family business since he had started the said business with the
capital given to him by his father?

Decision:
The answer to this question was given as a NO by the Delhi High Court for the reason that
Arjan Singh earned his income from the learning of herbal remedies acquired by him, and
capital if any, given to him by his father only facilitated him to earn an income from the learning
acquired by him. In fact, the use of the word 'business' for the work of Hakim carried on by
him is a misnomer. He was practicing the profession of Hakim, in that, he was rendering service
of medical advice relating to herbal remedies to the people suffering from diseases. In a

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Balbir Singh Uppal and Another Vs. Gurmeet Singh Uppal and Others RFA(OS) 73 OF 2010

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profession, the capital of a professional is his competency and specialized knowledge of his
profession.

In every business there is a use of learning. What needs to be seen is the dominant source of
the earning from a business: Whether it is from learning or from the capital. If the capital is the
dominant factor for the earning derived from the business and such capital was given from the
joint family funds, the earnings from the business would be the income of the joint family.
While in case where dominant source of the earnings derived from the business is learning,
such earning would be the income of the acquirer, irrespective of the fact whether the learning
was acquired or business was started by the acquirer from the joint family funds.

Shri Raj Kumar Singh Hukam Chandji Vs. Commissioner of Income-tax, Madhya
Pradesh13(1971)

Facts:
The assessee in this case is a Hindu Undivided Family. Previously a Hindu Undivided Family
was carrying on several business under the name and style of Sarupchand Hukamchand. That
family disrupted on March 30, 1950. On March 31, 1950, a company under the name and style
of Sarupchand Hukamchand Private Ltd. was incorporated for the purpose of acquisition from
M/s. Sarupchand Hukumchand, certain managing agencies, businesses, factories and property
by assessee which is the branch of that family

The Directors by a resolution appointed Sir Hukumchand Rajbahadur, Rajkumar and

Rajabahadur as managing Directors of the company for the purpose of management of the
business of the company on remuneration of Rs. 5,000/- per month for each of them for their
services. The assessee's branch represented by its Karta got 5,000 shares. Rajkumar acquired
30 further shares in the name of his wife, Premkumari and 10 shares in the name of
Rajabahadur. The consideration for all these acquisitions was found from the Hindu Undivided
Family funds and along with dividends were treated in the balance sheet of the assessee family
as its property. For the years 1951-54, the receipt of this Rs. 5,000/- per month received as
remuneration was treated as the income of Rajkumar as an individual and assessed on that
basis.

The sum of Rs. 63,000/- received by Rajkumar in the account year 1954-55 were assessed in
his hands as his individual property. On January 10, 1961, the Commissioner of Income-tax
issued a notice to the assessee to show cause why the assessment of the assessee for the
assessment year 1954-55 should not be revised by treating the sum of Rs. 60,000/- as the
income of the assessee Hindu Undivided Family of which Rajkumar was the Karta. The
assessee claimed the amount in question as his individual income. The Commissioner did not

13
Shri Raj Kumar Singh Hukam Chandji Vs. Commissioner of Income-tax, Madhya Pradesh AIR1971SC1454

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accept the contention of the assessee14; held that that income was of the assessee and taxed him
accordingly. Aggrieved by that decision, the assessee took up the matter in appeal to the
Income-tax Appellate Tribunal which upheld the contention of the assessee. The present case
is in appeal to the Supreme Court

Decision:
The Supreme Court laid down the principle on an examination of an number of cases which is
–the broader principle that emerges is whether the remuneration received by the coparcener in
substance though not in form was but one of the modes of return made to the family because
of the investment of the family funds in the business or whether it was a compensation made
for the services rendered by the individual coparcener. If it is the former, it is an income of the
Hindu undivided family but if it is the latter then it is the income of the individual coparcener.

If the income was essentially earned as a result of the funds invested the fact that a coparcener
has rendered some service would not change the character of the receipt. But if on the other
hand it is essentially a remuneration for the services rendered by a coparcener, the circumstance
that his services were availed of because of the reason that he was a member of the family
which had invested funds in that business or that he had obtained the qualification shares from
out of the family funds would not make the receipt, the income of the Hindu undivided family.
Applying the tests enumerated above to the facts found by the tribunal in the present case, the
income in question was held by the court to be the individual income of Rajkumar. He did not
become the managing director of the firm for the mere reason that his family had purchased
considerable shares in the firm. He was elected as a managing director by the Board of
Directors and he received his salary for his personal services. In the past the salary received by
him was assessed as his individual income. The tribunal has found that he was not appointed
as managing director as a result of any outlay or expenditure of or detriment to the family
property. It has further found that the managing directorship was an employment of personal
responsibility and ability. In these circumstances the conclusions reached by the tribunal that
the income in question cannot be treated as the income of the assessee family was upheld.
Hence the court held that the managing director's remuneration received by Raj Kumar Singh
was assessable as his individual income and not as the income of his Hindu undivided family.

CRITICAL ANALYSIS

The passing of the Hindu Gains of Learning Act, 1930 has removed the confusion with regard
to the nature of acquisition made from the learning of the individual to be his separate property
and not joint family property even if the learning was made from and to the detriment of the
joint family funds.

14
Commissioner of Income-tax, West Bengal v. Kalu Babu Lal Chand 37 I. I. T. R. 123

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However the need for such legislation was not only to protect the interest of the individual but
also that of the joint family which makes the expenses on the individual with an expectation of
returns in future. Thus the Act does not provide blanket permission to a coparcener to invest
the joint family funds, after learning, into an establishment and make that his exclusive source
of living. But the interest of the coparcener in application of his knowledge and efforts is also
protected. So to protect the dual interest, the following scheme came to be accepted:

• A private enterprise set up by the coparcener with the help of joint family funds, the
profits or gains of such establishment shall be joint family property.
• If in the same establishment, the coparcener receives salary or emoluments for
rendering services, then it will be distinct from the income of the business or
establishment and will be his separate property.

The test to determine whether the salary is in the nature of individual or joint family property
is that whether there is a nexus between emoluments to the coparcener and detriment to the
joint family property. This instils an application of discretion by the courts to determine such
nexus.

As seen in the above cases, the courts have applied this principle differently. While in one case
of profits from family business of a Hakim was considered to be his separate property
irrespective of the fact that the funds were contributed by the joint family funds.

The tendency of the courts has gone in a completely different direction from that followed prior
to the Act. The Act has now come to be applied more in the favour of individual rather than
the family. The courts therefore need to be vigilant in the application of the Act to ensure the
balance of interests of both the contending parties.

CONCLUSION & SUGGESTION .

The Hindu Gains of Learning Act, 1930 has crystallized the position with regard to the nature
of acquisition made from the learning of the individual to be his separate property and not joint
family property even if the learning was made from and to the detriment of the joint family
funds.

It has further provided for safeguards to ensure that the interest of the joint family property is
not prejudiced irrationally. Thus the Act is a welcome step which has removed doubts and
provided an equitable solution. The learning by a person, apart from funds, also requires mental
and physical capability and efforts, sincerity and dedication on the part of the learner. Also the
talent to utilize this learning into earnings is dependent on a number of other factors which is
not sure in all cases. The efforts of the individual coparcener should therefore accrue to him
even if the learning was financed by the joint family funds. On the other hand, an establishment
funded from the joint family funds should, on account of investment made by them; the profits
should accrue to them .
”

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The Act and its interpretation by the court have therefore balanced the dual interest of the joint
family and the individual which is an appreciable step .”

BIBLIOGRAPHY

Books
• A Short Treatise on Hindu Law: As Administered in the Courts of British India By
Herbert Cowell
• A Manual of Hindu Law By Standish Grove Grady
• Mulla's Hindu Law, 15th edition, 2006

Websites

• www.manupatra.com
• www.indiankanoon.org

Cases

• Prime Minister (Luximon Row Sadasew v. Mullar Row Bajee (1831) 2 Khapp 60
• Ghalakonda Alasani v. Chalakonda Ratnachalam (1864) 2 M.H.C.B. 56
• Lachmin Kaur v Debi Prasad (1898) ILR 20 All 435
• Jugmohan Das v Mangaldas (1886) ILR 10 Bom 528
• Burga Bat Joahi v. Ganesh Dat Joshi (1910) I.L.K. 34 All. 305
• Lachman Kuar v. Bebi Prasad (1897) I.L.R. 2 All 435
• Durvasula Gangadharudu v. Durvasula Narasammah and Ors. ( (1872) 7 Mad. H.C.R.
72
• Amar Nath And Gokulchand vs Hukam Chand Nathu Mal (1921) 23 BOMLR 671
• Chandrakant Manilal Shah And Another Vs. Commissioner Of Income-Tax
AIR1992SC66
• Balbir Singh Uppal and Another Vs. Gurmeet Singh Uppal and Others RFA(OS) 73
OF 2010
• Shri Raj Kumar Singh Hukam Chandji Vs. Commissioner of Income-tax, Madhya
Pradesh AIR1971SC1454
• Commissioner of Income-tax, West Bengal v. Kalu Babu Lal Chand 37 I. I. T. R. 123

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