1991 (1) TMI 61 - HC - Wealth-tax

Summary

Issues:
1. Whether the status of the applicant as a Hindu undivided family was rightly taken as specified?
2. Whether the release of rights in joint family properties by a female member ceases her membership in the Hindu undivided family?

Analysis:
The case involved a Hindu undivided family consisting of the karta, his wife, five daughters, and three sons, where two unmarried sons had passed away earlier, and their share of the joint family property had devolved on their mother, Jayamma. Jayamma executed a release deed giving up her rights in the family properties, which led to the question of whether she ceased to be a member of the Hindu undivided family. The contention was that since Jayamma released her rights, the family could not be considered to have a member with net wealth exceeding Rs. 1 lakh, affecting the wealth tax assessment. The Revenue argued that Jayamma, having been assessed on a net wealth exceeding Rs. 1 lakh, made the family taxable at a higher rate as a specified Hindu undivided family.

The court rejected the assessee's contention that Jayamma ceased to be a member of the family by releasing her rights in the joint family properties. It was emphasized that a female member of a Hindu family, not being a coparcener, becomes a member by marriage or birth to a male member and does not have the right to seek partition. The court clarified that membership in the joint family is not solely dependent on property rights but on the relationship with male members. The argument that membership status is linked to the right to maintenance or marriage expenses was dismissed, as Hindu law does not support such a principle. It was established that a female's membership in a joint family is based on her relationship with male members, not inherent property rights.

The court upheld the Appellate Tribunal's conclusion, ruling in favor of the Revenue. It was affirmed that Jayamma's release of rights did not affect her membership in the Hindu undivided family, and the family was correctly assessed as a specified Hindu undivided family for wealth tax purposes. The judgment clarified the legal principles governing membership in a Hindu undivided family and the implications of releasing rights in joint family properties on membership status.