Law:

Section:

Section 3 of the Wealth-Tax Act, 1957 - Hindu undivided family - Assessability of Wealth - SB, karta of assessee-HUF, received certain properties under will of his father JB - JB and his brothers initially inherited from his father certain properties which were subsequently partitioned in successive partitions - In his will, JB directed, inter alia, allotment of all his movable and immovable properties to his two sons with absolute and full right of disposal - Whether impugned inherited properties did not belong to assessee-HUF and wealth represented by them could not be assessed in its hands - Held, on facts, yes FACTS The karta of the assessee-HUF had received certain properties under the Will dated 4-5-1958 of his father, JB, who died on 12-2-1960. The deceased testator stated, inter alia, in his Will that he and his brothers had inherited from their father all the properties and money-lending business. They subsequently separated and the properties were partitioned. He had also partitioned later his properties amongst his two sons who maintained their families from its income. After such partition, no other issues had been born to him. He had paid considerable sum to his wife, including the allocation of Rs. 30,000 received from Life Insurance Corporation. He had also five daughters, including one unmarried daughter for whom he made a separate provision. Having due regard to the changes brought about by the Hindu Succession Act, he finally directed that all his properties, movable and immovable, should be received by his sons, J and S, with absolute and full right of disposal. The assessee did not show the value of the said properties in its wealth-tax returns for the assessment years 1960-61 to 1962-63 on the view that the same belonged to its karta in his individual capacity. In the course of income-tax assessment for the assessment year 1965-66. The ITO, relying on the terms of the said Will, concluded that the inherited properties belonged to the assessee-HUF and included the income therefrom in its hands. On that basis, the WTO reopened the wealth-tax assessments for the assessment years 1960-61 to 1962-63 (which were originally completed on 18-7-1973)…

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