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35.  Share of Income Received on Partition by Sole Coparcener and His Wife Assessable as HUF (Hindu Undivided Family)

Many a time an individual receives ancestral property at a partition. Later on he may marry and thus acquire the status of an undivided family consisting of himself and his wife. He may not have any male issue. In such a case sometimes a controversy arises before the Assessing Officer as to whether the property would be the property of the family, or of the individual. Fortunately, the Gujarat High Court in a judgement in the case of CIT v. Parshottamdas K Panchal (2002) 257 Tm 96 has held that in order to constitute a joint family it is not necessary that there must be tWo male members. And the wife of coparcener is certainly a member of the HUF.

The counsel for the Revenue submitted that where on a partial partition of a Hindu undivided family, the assessee was allocated his share, the status of individual governed by Hindu law could not automatically change to that of a Hindu undivided family merely on his marriage and till a son is born into a smaller Hindu undivided family, the share income from the firm will have to be treated as belonging to the assessee in his individual capacity. No one appeared on behalf of the responded assessee. The Gujarat High Court was of the view that the main question was whether a Hindu undivided family or a Hindu joint family could be formed only with a sole male member. Property of a joint family, therefore, does not cease to belong to the family merely because the family is represented by a single coparcener who possesses rights which an owner of property may possess. Reference was made by the Gujarat High Court to various judgements and finally it was held that in this case on the marriage of the assessee. His wife became a member of his family with a right to claim maintenance charges on the property held of assessee which he had obtained earlier under a partition. The family of the assessee, therefore, was a joint family and the property in the hands of the family which he got earlier at the partition was to be considered as property held by the assessee in his capacity as the karta of the Hindu undivided family. Therefore, the Gujarat High Court was of the view that the share income from KBS was rightly deleted from the total income of the assessee who was assessed in the status of an individual, since the said income was required to be assessed in the hands of the HUF of the assessee. Hence the Gujarat High Court answered the reference in the affirmative, i.e. in favour of the assessee and against the revenue.

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