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Section 3, read with section 20 of the Wealth-tax Act, 1957 - Charge of tax - Assessment year 1957-58 - Assessee was assessed to income-tax for year in question in status of HUF - Relevant valuation date was 2-11-1956 - Case of assessee was that HUF stood disrupted on 31-1-1956, when one of members filed suit for partition - However, there was an award of arbitrator that family stood disrupted on and from 3-11-1956 which was made rule of court - Tribunal also in view of arbitrator's award and on consideration of entirety of evidence came to conclusion that HUF continued up to 2-11-1956 - Whether, in aforesaid circumstances, assessee was rightly assessed in status of HUF - Held, yes FACTS The HUF known as M/s. KH was assessed to income-tax in such status up to the assessment year 1957-58. Under section 25A of the Indian Income-tax Act, 1922, the ITO had recorded an order recognizing the disruption in the family on 2-11-1956, which was the last day of the accounting period relevant to such assessment. The case of the assessee before the WTO however, was that in respect of the instant assessment, the HUF had been disrupted on 31-1-1956, when one of the members of the HUF, had filed a suit for partition in the High Court. The argument was that there was no HUF in existence on the relevant valuation date, namely, on 2-11-1956, for the purpose of wealth-tax assessment. The WTO did not accept this contention. The WTO relied on the order under section 25A of the Indian Income-tax Act, 1922, and stated that the HUF did exist until 2-11-1956. There was an award of arbitrator which stated that on and from 3-11-1956 there was a disruption of the joint family and severance in the joint status of the parties. The award was made rule of Court. The AAC as well as the Tribunal rejected the claim of the assessee that although the property held by the HUF might not have been divided by metes and bounds amongst the various members of the HUF on the 2-11-1956, the HUF actually ceased to exist on its disruption according to Hindu law on 31-1-1956, when suit for partition was filed. On reference : HELD The principle seems to be that the unequivocal expression of intention to separate…

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