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Issues:
1. Validity of wealth-tax assessment on a Hindu undivided family. 2. Interpretation of section 20 of the Wealth-tax Act, 1957. Analysis: The judgment by the Andhra Pradesh High Court dealt with the validity of a wealth-tax assessment on a bigger Hindu undivided family. The assessee had claimed full partition between himself and his son, resulting in nil net wealth for wealth-tax purposes. However, the Wealth-tax Officer assessed the Hindu undivided family's net wealth to wealth-tax. The Assistant Commissioner initially set aside the assessment, but the Income-tax Appellate Tribunal later restored the Wealth-tax Officer's order. The key issue was whether the assessment was valid under section 20 of the Wealth-tax Act, 1957. The court highlighted the importance of the valuation date in determining wealth-tax liability. Section 2(q) of the Wealth-tax Act defines the valuation date as the last day of the previous year. The court emphasized that even if a partition occurred on the valuation date, wealth-tax could still be assessed on the net wealth of the joint family. Section 20(1) of the Act specifies that if a partition is identified by the assessing authority, the net wealth of the joint family must be assessed, with each member liable for the tax assessed. The court referenced previous case law to support the Tribunal's decision that the assessment of the bigger Hindu undivided family was valid under section 20(1) of the Act. Ultimately, the court agreed with the Tribunal's approach and ruled in favor of the Revenue, upholding the wealth-tax assessment on the Hindu undivided family. The judgment clarified that partition on the valuation date does not absolve the joint family from wealth-tax liability, as section 20 of the Wealth-tax Act mandates assessment based on the joint family's net wealth. The court's decision reaffirmed the legal principle that partition on the valuation date does not affect wealth-tax assessment for the relevant year.
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