1987 (6) TMI 101 - AT - Income Tax

Summary

Issues:
Partition of joint family property, entitlement of wife to share in joint family property, validity of share allotted to wife, maintenance provision for wife at the time of partition, application of section 263 of Income-tax Act.

Analysis:
The judgment involved the issue of partition of joint family property where a house owned by a joint family was acquired by the Government. The family decided to partition the property, and a memorandum was executed to record the oral partition, allotting one-fourth share to each member, including the wife. The Income-tax Officer accepted this partition and computed the income accordingly. However, the Commissioner of Income-tax invoked section 263, arguing that the wife was not entitled to a share in the joint family property as per the Southern School of Mitakshara Law. The Commissioner directed the assessments to be redone, including one-third share of capital gains for only the three entitled members. The appeal challenged this decision.

The main argument presented was whether the wife's share at the time of partition could be considered as provision made for her maintenance. The counsel for the assessee contended that the wife was entitled to maintenance, and the share allotted to her was equivalent to the share given to her son, thus serving as maintenance provision. The departmental representative, however, argued that under the Southern School of Mitakshara Law, the wife was not entitled to a share, and the Income-tax Officer's order was erroneous, justifying the Commissioner's invocation of section 263.

The Tribunal analyzed previous judgments, including the Madras High Court and Andhra Pradesh High Court decisions, which stated that the practice of allotting shares to females in joint family property had become obsolete in Southern India. However, the Tribunal held that the share allotted to the wife should be considered as provision made for her maintenance, citing the Hindu Adoptions and Maintenance Act. The Tribunal also referred to various cases where similar allocations to wives were deemed valid under Hindu Law.

Ultimately, the Tribunal concluded that the share allotted to the wife was for her maintenance, even though she was not entitled to a share in the family properties. Therefore, the Income-tax Officer's assessment was deemed correct, and the Commissioner's invocation of section 263 was unjustified. The Tribunal canceled the Commissioner's orders, allowing the appeals in favor of the assessee.