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TMI Blog1982 (11) TMI 63X X X X Extracts X X X X X X X X Extracts X X X X ..... 25(2). The assessee objected for invoking the provisions of section 25(2). The Commissioner did not accept the objections of the assessee. He held that the properties of a HUF will remain with the family till a partition is effected. Since no partition is effected, all the properties of the family are assessable to wealth-tax as belonging to the family. Accordingly, he set aside the assessment and directed the WTO to re-do the same bringing into tax the entire wealth of the family. Against the same, the present appeal is filed. 3. It will be necessary to refer to the provisions of the Hindu Succession Act, 1956. Section 6 of the said Act deals with devolution of interest in coparcenary property. It reads as under : "When a male Hindu dies after the commencement of this Act, having at the time of his death an interest in a Mitakshara coparcenary property, his interest in the property shall devolve by survivorship upon the surviving members of the coparcenary and not in accordance with this Act : Provided that, if the deceased had left him surviving a female relative specified in clause I of the Schedule or a male relative, specified in that clause who claims, through such fem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... devolve on his heirs. This does not affect the continuance of the HUF. Where proviso to section 6 of the Hindu Succession Act applies, there will be no dissolution of joint family status. The coparcenary will continue till a partition is effected but the coparcenary property will not include the interest of the deceased coparcener which has devolved on his heirs by inherited succession. That share of the deceased which has devolved on the heirs by intestate succession goes out of the HUF and the HUF continues to be the owner of the remaining share. The share of the deceased which has devolved on his heirs will be held by them as tenants-in-common. Under section 19 of the Hindu Succession Act, the heirs shall take the property as tenants-in-common and not as joint tenants. Thus, the share of the deceased in the coparcenary property which has devolved on his heirs by intestate succession having gone out of family to the heirs who held them as tenants-in-common cannot be included in the net wealth of the HUF. In view of Explanation 1, a notional partition shall be deemed to arrive at the share of the deceased. There need not be actual partition. The Commissioner was wrong in thinking ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... embers, continues for the purpose of income-tax but the share of that joint family is diminished as in the case of alienation of any of the joint family properties. The above decision answers all the objections of the revenue which squarely applies to the instant case. 6. In CWT v. Kantilal Manilal [1973] 90 ITR 289, the Gujarat High Court held as under : ". . . It would, therefore, appear to be obvious that when the proviso says that the interest of a deceased coparcener in coparcenary property shall devolve by intestate succession, what is meant is that the share in the coparcenary property which would have been allotted to him on partition, if a partition had taken place immediately before his death, shall devolve on the heirs. The concept of a notional partition is brought in for the purpose of defining the nature and quality of the interest which devolves by succession. It is the share which would have been allotted to the deceased coparcener on partition, if a partition had taken place at that time. The quantum of share is fixed : the proportion in which the share is to be counted are also crystallized. This specific share in definite ascertained properties, subject of co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... very first step, to ascertain the share of the deceased in the coparcenary property. For, by doing that alone can one determine the extent of the claimant's share. Explanation 1 to section 6 resorts to the simple expedient, undoubtedly fictional, that the interest of a Hindu Mitakshara coparcener 'shall be deemed to be' the share in the property that would have been allotted to him if a partition of that property had taken place immediately before his death. What is, therefore, required to be assumed is that a partition had in fact taken place between the deceased and his coparceners immediately before his death. That assumption, once made, is irrevocable. In other words, the assumption having been made once for the purpose of ascertaining the share of the deceases in the coparcenary property, one cannot go back on that assumption and ascertain the share of the heirs without reference to it. The assumption which the statute requires to be made that a partition had in fact taken place must permeate the entire process of ascertainment of the ultimate share of the heirs, through all its stages. To make the assumption at the initial stage for the limited purpose of ascertaining the sha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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