Law:

Section:

Section 5(1)(iva), read with section 20 of Wealth-tax Act, 1957 – Exemptions – Agricultural land – By virtue of an agreement a partial partition as to property took place in a HUF consisting of assessee and his six sons, declaring that they would hold three estates as tenants-in-common in equal shares, and those properties would cease to be joint family properties-HUF continued to be undivided for other purposes – Subsequently, it was recorded in books of family that in regard to three estates there had been a partition and corresponding capital had been dividend amongst members, by way of formal partition deed – WTO while accepting that they were holding three estates as tenants-in-common, each of them having 1/7th share in them, assessed them as an AOP and held that each one of them was not entitled to exemption available under section 5(1)(iva) – AAC held that estates would be deemed to belong to HUF and not to individuals until division of estates by metes and bounds, and, accordingly, declined to give relief in hands of each of assessees – Tribunal held that estates were held by assessees-as tenants-in-common, that they did not belong to HUF by virtue of agreement which brought about a partial partition and hence, their value could not be included in HUF's wealth, but 1/7th of their value should be included in wealth of each of coparcener and benefit of exemption under section 5(1)(iva) be allowed to each of them – Whether section 20 applies to a case where joint family property has been partitioned as a whole among various members or group of members in definite portions, and, therefore, it cannot be applied to a case of partial partition of family's assets – Held, yes – Whether, since, partial partition amongst members of HUF was in respect of three estates only and family continued to be joint for other purposes, section 20 did not apply in instant case – Held, yes – Whether, therefore, Tribunal was right in holding that partitioned properties did not belong to HUF on valuation dates and that assessee as co-owner owned 1/7th share in said estates, and was also entitled to deduction under section 5(1)(iva) – Held, yes FACTS A partial partition as to…

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