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Issues:
1. Assessment of Hindu Undivided Family (HUF) property after the death of Karta. 2. Validity of protective assessment by the Wealth Tax Officer (WTO). 3. Interpretation of Hindu Succession Act in relation to devolution of property. 4. Application of Section 20 of the Wealth Tax Act for partition assessment. Analysis: Issue 1: Assessment of Hindu Undivided Family (HUF) property after the death of Karta The case involved the assessment of an HUF property after the death of the Karta, where the deceased's wife and minor son were the remaining members. The contention was whether the HUF continued to exist or if a partition had occurred. The Appellate Tribunal held that a lawful partition of the HUF had taken place after the death of the Karta. The Tribunal emphasized that the assets had been divided, indicating an actual partition. The Tribunal directed the Wealth Tax Officer (WTO) to assess the property in the hands of the wife and son on a substantive basis, rejecting the protective assessment made by the WTO. Issue 2: Validity of protective assessment by the Wealth Tax Officer (WTO) The WTO had made a protective assessment on the basis that the HUF property continued to exist as per the circumstances, even though a return was filed in the name of the minor as an individual. The Appellate Tribunal disagreed with the WTO's approach, stating that since the assets had been divided between the mother and son, a substantive assessment should have been made. The Tribunal found no justification for the protective assessment and directed the WTO to assess the property in the hands of the individuals. Issue 3: Interpretation of Hindu Succession Act in relation to devolution of property The Tribunal analyzed the provisions of the Hindu Succession Act, particularly Section 6 and its proviso, to determine the devolution of property after the death of the Karta. It highlighted that the Act specified the devolution of the deceased's share to the wife and son, making it their individual property. The Tribunal referred to relevant case law to support its interpretation of the Act in the context of the case. Issue 4: Application of Section 20 of the Wealth Tax Act for partition assessment The Tribunal discussed the relevance of Section 20 of the Wealth Tax Act, which deals with the assessment after the partition of an HUF. It emphasized that the WTO should be notified of a partition, and a valid return must be present for assessment. The Tribunal clarified that the claim for partition should be made during the assessment of the family in question and not in the assessment proceedings of another individual. It critiqued the AAC's direction to make a substantive assessment in the hands of the minor, stating it was not justified. In conclusion, the Appellate Tribunal allowed the departmental appeal, setting aside the order of the AAC and restoring the decision of the WTO regarding the assessment of the HUF property.
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