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TMI Blog1997 (5) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee reverted back to the status of a Hindu undivided family with the birth of a daughter after partial partition was effected on April 1, 1971, amongst coparceners including his wife, in respect of capital he got on partial partition ? 2. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in holding that income from dividends, interest from banks and annuity refunds belonged to the Hindu undivided family and could not be subjected to tax in the assessee's hands as individual ? " The facts relevant to the questions referred to us are : The assessment year involved is 1977-78, the previous year of which ended on March 31, 1977. The assessee is assessed in the status of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sequent birth of a daughter to him would not get back to him the status of Hindu undivided family, as no Hindu undivided family qua this property was in existence at that time. The Income-tax Officer held that the said income did not belong to the Hindu undivided family but to the individual and included the same in the assessment of the assessee as an individual. An appeal carried by the assessee to the Commissioner of Income-tax (Appeals) did not meet with success. The assessee thereafter filed a further appeal before the Tribunal. The Tribunal accepted the contention raised by the assessee and allowed the appeal. After noticing a number of judgments of various courts it was held that what was received by the assessee on partition was a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsists of all persons lineally descended from a common ancestor, and includes their wives and unmarried daughters. A daughter ceases to be a member of her father's family on marriage, and becomes a member of her husband's family. (2) The joint and undivided family is the normal condition of Hindu society. An undivided Hindu family is ordinarily joint not only in estate, but also in food and worship. The existence of joint estate is not an essential requisite to constitute a joint family and a family which does not own any property may nevertheless be joint. Where there is joint estate, and the members of the family become separate in estate, the family ceases to be joint. Mere severance in food and worship does not operate as a separat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed family. A died. On these facts, their Lordships held that the property of the Hindu undivided family did not cease to belong to the family merely because the family was represented by a single coparcener, B, who possessed rights which an owner of property might possess, and the income received therefrom was taxable as income of the Hindu undivided family. It was also observed that there need not be more than one male member to form a Hindu undivided family as a taxable entity under the Income-tax Act. It was held : " The first contention is plainly unsustainable. Under section 3 of the Income-tax Act, 1961, not a Hindu coparcenary but a Hindu undivided family is one of the assessable entities. A Hindu joint family consists of all perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntity must consist of at least two male members. " Similarly in N. V. Narendranath v. CWT [1969] 74 ITR 190 (SC) regarding the share of Hindu undivided family property received on partition by a coparcener having a wife, two minor daughters and no son, it was held that in the hands of the coparcener the property had to be assessed as a Hindu undivided family property and not his individual property for the purpose of wealth-tax. It was observed as under : " There need not be at least two male members to form a Hindu undivided family as a taxable unit for the purpose of the Wealth-tax Act, 1957. The expression 'Hindu undivided family' in the Act is used in the sense in which a Hindu joint family is understood in the personal laws of Hind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al. All persons lineally descended from a common ancestor including their wives and unmarried daughters constitute a Hindu undivided family which is the normal condition of Hindu society. There need not be at least two male members to constitute a Hindu undivided family. A Hindu undivided family can consist of a male Hindu, his wife and unmarried daughter. As against this the Hindu coparcenary is a much narrower body than the joint family. As per article 213 of the Hindu Law by Mulla, it includes only those persons who acquire by birth an interest in the joint or coparcenary property. It includes the three generations next to the holder in unbroken male descent. The incidents of self-acquired property are different and distinct. The pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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