Law:

Section:

Section 3, read with section 2(e), of the Wealth-tax Act, 1957 - Chargeability to tax - Individual - Assessee was a jagirdar - On abolition of jagir, Government determined a certain sum as payable to her for taking over her rights in jagir - Assessee later adopted a son to her late husband with approval of Government - Assessee's claim that assessment should be made in status of HUF as income was primarily meant to enure for benefit of family - Whether unless widow surrendered any jagir and asked for and obtained sanction for grant to be made in favour of her adopted son, adopted son had no right to jagir - Whether, therefore, it could not be hold that adopted son got any interest in Atiyat Maash which had been granted to assessee - Held, yes - Whether, therefore, assessee could not be assessed in status of HUF - Held, yes FACTS The assessee was the jagirdar and, in respect of the income from the jagir, she was being assessed as an individual. On the abolition of the jagirs, the Government determined a certain sum as payable to her for taking over her rights in the jagir. In May, 1939, she adopted a son of her late husband and intimated the same to the Government. The Government approved the adoption. Before the WTO, the assessee made a claim that the assessment should be made in the status of a HUF, as the income was primarily meant to enure for the benefit of the family. The WTO rejected the claim of the assessee on the ground that jagir, being Atiyat property, was the personal property of the holder, and as such he made the assessment on the assessee in the status of an individual. On the valuation date, the assessee had to receive a sum of Rs. 8,99,650 from the Government for taking over her rights in the jagir. The assessee objected to the inclusion of the commutation amount in her assessment on the ground that it did not constitute wealth. The WTO repelled the contention of the assessee and determined the value of the amounts receivable by the assessee in future at Rs. 7,20,000 and included the same in the assessment of the assessee. The AAC and the Tribunal upheld the assessment. On reference : HELD It is a well established proposition of law relating to…

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