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Issues:
- Determination of whether the share taken by a male on partition of his family HUF, where his wife was not allotted a share, is held in his individual capacity or in the capacity of a HUF comprising himself and his wife. Analysis: The department argued that after partition, family members hold representative shares in their individual capacities, and the wife not being allotted a share could be considered as relinquishing her share. They contended that no new HUF could form between a member and his wife post-partition. Citing legal precedents, they asserted the male held the property individually, with the right of alienation akin to individual property. The department relied on cases like CIT v. K. Satyanarayan Murty and CIT v. Anil J. Chinai to support their stance. On the other hand, the respondent relied on cases like Sarabhai Tribhovandas v. CED and Smt. S. Harish Chandra v. ACED to argue that the property was held by the deceased as karta of the HUF with his wife, and only 50% of the property passed on his death. The tribunal considered various legal decisions cited by both parties. The Orissa High Court held that the inseparability of husband and wife does not automatically create a HUF between them. The Bombay High Court dealt with a case of gift by the sole surviving coparcener, while the Rajasthan High Court discussed the passing of property on the death of a coparcener. The tribunal distinguished the Rajasthan High Court case due to the enactment of the Hindu Adoptions and Maintenance Act, stating that adoption under this Act severs connections with the natural family from the date of adoption. They also referenced the Gujarat High Court case on the effect of a lady's death on the HUF, which was deemed irrelevant to the current case. The Andhra Pradesh High Court's decision in CIT v. Dara Seshavataram was pivotal, as it held that property received by a male post-partition, where the wife did not receive a share, was held in the capacity of the HUF. The tribunal aligned with this reasoning, concluding that the deceased held the property as karta of the HUF with his wife, and only 50% of the property passed on his death. In conclusion, the tribunal upheld the Controller's decision and dismissed the department's appeal. Both members of the tribunal, Shri A. Kalyanasundharam and Shri H. S. Ahluwalia, agreed on the judgment.
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