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Assessment under Section 26(2) of the Indian Income-tax Act for a Hindu undivided family after the death of the manager. Analysis: The case involved the assessment of a Hindu undivided family under Section 26(2) of the Income-tax Act after the death of the family manager. The deceased manager had filed a return showing income, but before assessment, he passed away. The son continued the business and was assessed to income tax. The issue arose when the Assistant Commissioner proposed to treat the son as an individual for assessment purposes, arguing that the Hindu undivided family ceased to exist after the father's death. The son, however, contended that he and his wife constituted a Hindu undivided family. The main contention was whether the son could be assessed under Section 26(2) of the Act. The son argued that he did not succeed to the business as he acquired it by survivorship under Hindu Law, and there was no transfer of ownership. Additionally, he contended that as he and his father constituted a Hindu undivided family, the terms of Section 26(2) were not satisfied after his father's death. On the other hand, the Commissioner's counsel argued that the son, now an individual, had succeeded to the business and was distinct from the previous Hindu undivided family. The Court analyzed the meaning of "succession" in the section, emphasizing a transfer of ownership as a requirement. The Court held that the son did not "succeed" to the business within the meaning of Section 26(2) as there was no transfer of ownership, and the son acquired the business by survivorship. Therefore, he was not liable to be assessed under that section. The Court also briefly discussed whether the son and his wife constituted an undivided Hindu family, highlighting conflicting arguments regarding the wife's status in such a family. However, as the main point was decided in the son's favor, the Court did not delve deeper into this aspect. In conclusion, the Court ruled that the son was not liable to be assessed under Section 26(2) of the Indian Income-tax Act. The son was awarded costs and a refund. The other judges on the bench concurred with this decision, leading to a unanimous judgment.
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