Law: Wealth Tax Act, 1957

Section: 3

Section 3 of the Wealth-tax Act, 1957 - Charge of wealth-tax - Assessment year 1960-61 - On valuation date, assessee's family consisted of himself, his wife and an unmarried daughter - Assessee received certain assets on partition between himself and other member of a HUF of which he was a member - At time of aforesaid partition, assessee had no son and no male child had been born to him afterwards - Assessee submitted his Wealth-tax return in status of a HUF - WTO, however, assessed assessee in status of an individual - Whether as there was no other coparcener with assessee on valuation date, assessment to wealth-tax was rightly made on basis that assessee was an individual - Held, yes FACTS On the valuation date, the assessee's family consisted of himself, his wife and an unmarried daughter. He received certain assets on partition between himself and another member of a Hindu joint family. Neither at the time of the partition nor till the valuation date, the assessee had any male child. He submitted his Wealth-tax return in the status of a HUF. But the WTO determined the status of the assessee as that of an individual. The Wealth-tax authorities had taken the view that the assets received by the assessee on partition belonged to him absolutely, although they were capable of being owned by a Hindu undivided family consisting of the assessee and his son or sons that might be born or adopted subsequently. On appeal, the assessee claimed to be assessed as a HUF, but the AAC as well as the Tribunal dismissed the appeal. HELD What the assessee got on partition as his share in the ancestral property of the joint family no longer retained the character of coparcenary property, as the partition cut off the claims of the other dividing coparceners. If the assessee would have any coparcener in his own branch, either a son, grandson or great-grandson, the partitioned share of the ancestral property would belong to that coparcenary after the break of the larger and parent coparcenary. In the present case, however, the assessee had no son either born or adopted till the date of valuation ; and, therefore, the property that he got on partition became his separate property…

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