1989 (10) TMI 71 - AT - Wealth-tax

Summary

Issues:
1. Dispute over the assessment of property value in wealth tax returns due to claimed partition.
2. Validity of claimed partition of fully rented out chawls owned by an HUF.
3. Requirement of evidence for partition and its legal implications under the Hindu Succession Act.
4. Interpretation of judicial decisions on automatic disruption of an HUF upon death of a member.
5. Burden of proof on the assessee regarding claimed partition.

Analysis:
1. The dispute arose when the Department contested the AAC's direction to the Wealth-tax Officer not to assess the value of certain properties in the assessee's wealth. The assessee initially included the property in returns but later filed a nil return, leading to the AAC directing a reevaluation based on the claim of partition.

2. The property in question, fully rented out chawls, was owned by an HUF with a claimed partition agreement in 1968, supported by affidavits of coparceners. The AAC allowed the claim based on the family tree and legal position under the Hindu Succession Act, directing the WTO not to assess the property in the hands of the HUF.

3. The legal representative of the Department argued against the claimed partition, citing the necessity of a formal order under the Wealth-tax Act to recognize it. The representative contended that the property was jointly owned as per records, and the affidavits were self-serving. The assessee's advocate relied on statutory disruption under the Hindu Succession Act, emphasizing the automatic partition upon the death of the karta.

4. The Tribunal analyzed judicial decisions, including the Supreme Court's interpretation of section 6 of the Hindu Succession Act, emphasizing the rights of female heirs and the non-automatic disruption of an HUF upon the death of a member. The Tribunal concluded that there was no basis for the assessee's claim to partition based on the lack of objective evidence and legal support for the claimed disruption.

5. Ultimately, the Tribunal allowed all appeals, rejecting the assessee's claim to partition due to the failure to provide substantial evidence and legal grounds for the claimed disruption of the HUF. The decision highlighted the burden of proof on the assessee in establishing the validity of a partition claim, especially in the absence of concrete documentation and legal support.