Law:

Section:

Section 4 of the Income-tax Act, 1961 - Hindu undivided family - Assessable as - S held certain shares as an individual and dividend income arising there from was assessed as his individual income after partial partition from his sons, who were members of present assessee-HUF - Subsequent to death of S, his shares became property of his widow alone - Whether dividend income received by widow would be assessable in her hands and not that of assessee - Held, yes Facts One S constituted a HUF comprising of himself, his wife and unmarried daughter. His sons had already separated after a partial partition and were members of the present assessee-HUF. S held certain shares as an individual and the dividend income arising there from was assessed as his individual income after partial partition. Subsequent to the death of S, his shares became property of his widow alone. The Tribunal held that by virtue of section 14(1) of the Hindu Succession Act, 1956, the dividend income so received by the widow during the relevant period was her absolute property and not that of any HUF and, thus, the income from the dividends would be assessable in the hands of the widow alone. On reference: Held In the instant case, since there was no infirmity in the conclusion arrived at by the Tribunal, the Tribunal was justified in law in holding that the dividend income was assessable as absolute property of the widow and not in the hands of the assessee-HUF. Case referred to Badri Pershad v. Smt. Kanso Devi AIR 1970 SC 1963. R.N. Surolia for the Respondent. ORDER 1. This is a reference at the instance of the revenue under section 256(1) of the Income-tax Act, 1961 ('the Act') to decide the following question of law: "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the property left by a Hindu governed by the Mitakshara school of Hindu law will devolve on his widow and not to the HUF of the only separated son and thus the income from the dividends would be assessable in the hands of Smt. Tej Kanwar and not in the hands of assessee-HUF?" 2. The question for decision in this reference is whether the Tribunal correctly held that dividend…

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