9911796707
TMI Blog1991 (1) TMI 207X X X X Extracts X X X X X X X X Extracts X X X X ..... hillong (residence) which value was shown at Rs. 1,85,000. The value was determined for assessment at Rs. 5,45,409 in the original assessment on the basis of the Valuation Officer's report made during the original assessment. The assessing officer noted that the assessee claimed for freezing of the value of that property under section 7(4). The assessing officer did not agree and took the value as assessed in the original assessment for the assessment year 1982-83. 3. For the assessment year 1983-84, the assessing officer noted that the facts were similar with those of the earlier year. He noted that the value of the entire property as it stood before the partition of the HUF M/s. Ganeshdas Sreeram, was determined at Rs. 7,69,000 as on 31-3-1979 by the Valuation Officer. He noted that there was a total partition effected on 11-12-1980 on the basis of which, the land and the residential premises of 8729 square feet had been allotted to the assessee HUF M/s. Rameswar Prasad Goenka. It was submitted before the assessing officer that the value has been shown at Rs. 1,85,000 in the return and the assessee claimed that the said property had been used for residential purposes of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed with the provisions of section 39(1) of the Estate Duty Act. It is reiterated by him that interest of a member in the HUF properties (Mitakshara) passes on the death and was includible in the estate and, accordingly, relief under section 33(1)(n) of the Estate Duty Act was allowable. 6. It is also submitted that similar would be the position where the residential house is reflected in the assets of the partnership firm and the partners were deemed to be the owners of the firm's property for the purpose of section 33(1)(n). It is urged that this is in consonance with the spirit of the Circular No. 330, dated 6-3-1982 [135 ITR 14 (Statute)]. It is, therefore, urged that in view of the different circumstances and having regard to the position in law, the claim of the assessee was wrongly rejected by the authorities below and the relief may be allowed now. 7. The learned counsel for the revenue, on the other hand, submits that the authorities below have properly appreciated the correct principles in law as far as the rights and liabilities of the assessee is concerned in respect of the property included. In fact, the reasons adopted by the authorities below in their respective o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon'ble Supreme Court in the case as CED v. Kantilal Trikamlal [1976] 105 ITR 92. 9. In the case of Gowli Buddanna v. CIT [1966] 60 ITR 293, the Hon'ble Supreme Court held on the facts of that case the property of the joint family did not cease to belong to the family merely because the family was represented after the death of one male member, by a single coparcener, who possessed rights which an owner of property might possess, and the income received therefrom was taxable as income of the Hindu undivided family. In the case of Gowli Buddanna, the observation of the Judicial Committee as observed at page 543 (1957), A.C. 540, was reproduced at page 301 partly. Amongst other things, it was noted that the family, a body fluctuating in numbers and comprised of male and female members, may equally well be said to be owners of the property, but owners whose ownership is qualified by the powers of the coparceners. It was noted that there is in fact nothing to be gained by the use of the word 'owner' in this connection and it is only by analysing the nature of the rights of the members of the undivided family, both those in being and those yet to be born, that it can be determined wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hed the earlier decision in the case of Kancharla Kesava Rao. At page 101, it was observed that the proposition is trite that in an undivided Hindu family coparceners have no predictable or defined share but each has an antecedent title in every parcel of property and is jointly the owner and in enjoyment with the others. It was observed further that it is well established that at the very moment members decide upon a partition, a division in status takes place whereupon the share of the demanding member gets crystallised into a definite fraction and if there is division by metes and bounds the allotment of properties vivifies and specifies such shares in separate ownership. 12. For the purpose of computation of income under the Income-tax Act and in particular in respect of section 9 of the Indian Income-tax Act, 1922, the Hon'ble Supreme Court in the case of R.B. Jodha Mal Kuthiala v. CIT [1971] 82 ITR 570 has observed that for the purposes of the said Act, the owner must the person who can exercise the rights of the owner and not on behalf of the owner but in his own right. That was the case in which the income was sought to be assessed in the hands of the custodian of the eva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ight of the passage from Green's Book on Death Duties, it has been held by the Supreme Court that the right of a coparcener to demand a partition and to obtain his legitimate share in the joint family property is an inchoate right. It was also noted that when an actual partition takes place, it is clear that the share of the disponer in the property becomes known and vested and the value of that share can be very easily ascertained as at the date of disclaimer or release. It was further noted in the said judgment that until such demand is made, it is not possible to predicate what his exact share is and what the value of his share in the Hindu coparcenary property is. 16. As far as wealth-tax matters concerned relating to the claim for exemption under section 5(1)(iv) pertaining to a house, such exemption can be allowed in the hands of the partners though the property might have been owned by the partnership firm. This was after considering rule 2 of the Wealth-tax Rules read with section 2(m) of the Wealth-tax Act. In such cases, it was held that the firm is not an wealth-tax assessee and in calculating the net wealth of the firm, allocation to the partners would have to be made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can be allowed to be made on the basis of the assessment of that year as determined for the assessment year 1971-72 or on the later valuation date, following the event when the assessee became the owner of the said property. We have mentioned above that a coparcener is not called upon to pay wealth-tax in respect of his coparcenary right or interest in the HUF properties as the HUF itself is an assessee and any rebate, exemption etc. that would be entitled could be worked out in the hands of the HUF assessee, inasmuch as the coparcener as such, is not an assessee in view of the fact that the coparcener is not the owner of any property which can be said to be belonging to that coparcener for the purpose of assessment. Under the Wealth-tax Act, the liability would arise out of ownership of the asset and not otherwise. In the case of CWT v. Bishwanath Chatterjee [1976] 103 ITR 536, the Hon'ble Supreme Court while dealing with the case of Dayabhaga School and on the facts of that case held that mere possession or joint possession, unaccompanies by the right to, or ownership of property would, therefore, not bring the property within the definition of "net wealth" for it would not then ..... 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