1982 (6) TMI 139 - AT - Wealth-tax

Summary

Issues:
Claim to exclude certain properties from the net wealth of the assessee-HUF based on testamentary succession and character of joint family properties.

Analysis:
The case involves appeals by the assessee, a HUF, claiming the exclusion of certain properties from its net wealth. The dispute arises from a partition deed between the father and his three sons, followed by a will bequeathing properties equally to the sons. The assessee contended that the share bequeathed by the will to one of the sons should be assessed as individual property and excluded from the HUF's net wealth. The WTO and AAC disagreed, questioning the nature of the properties and the validity of the claim.

Upon review, the Tribunal noted that the father, post-partition, had the right to dispose of his share under the Hindu Succession Act. Properties acquired post-partition were considered his absolute properties. Citing a Madras High Court decision, it was clarified that properties devolving after partition do not automatically become joint family properties. The Tribunal emphasized that properties received by testamentary succession with absolute ownership rights cannot be deemed joint family properties solely based on their ancestral nature.

However, the revenue raised a concern regarding the treatment of income from these properties as HUF income, suggesting a possible conversion to joint family properties by declaration or conduct. The Tribunal found a lack of evidence to support this claim, highlighting the absence of identification of properties or declarations of conversion. Additionally, ongoing partition proceedings and the treatment of properties received by other sons raised further complexities. As the question of conversion is factual and evidence-dependent, the Tribunal set aside previous orders and remanded the matter to the WTO for fresh consideration with all necessary evidence.

Ultimately, the appeals were treated as allowed for statistical purposes only, signifying a procedural decision without altering the substantive issues at hand.