Abolition compensation from an impartible estate retains joint family character and is assessable as Hindu undivided family property.

Compensation received on abolition of an impartible estate under the Madras Estates (Abolition and Conversion into Ryotwari) Act was treated as joint family property because the statutory scheme deemed a notional partition and preserved the estate's ancestral character. The asset received in place of the estate was therefore not self-acquired property of the individual sharer. Income derived from the compensation was likewise assessable as Hindu undivided family property, particularly where coparcenary members existed in the family.

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Issues: Whether compensation received on abolition of an impartible estate under the Madras Estates (Abolition and Conversion into Ryotwari) Act, 1948, and the income derived from its investment, were assessable in the hands of the assessee as individual property or as joint family property in the status of a Hindu undivided family.

Analysis: The compensation paid under the Estates Abolition Act was treated by the statutory scheme as joint family property and was distributed on the basis of a notional partition on the notified date. The character of an impartible estate, though clothed with incidents of separate property, retained its ancestral source and the family's survivorship rights. The compensation therefore represented property received by virtue of the assessee's status as a member of the family and not by self-acquisition. The earlier authorities relied on by the Revenue were distinguished on their facts, while the binding local precedent treating such compensation as joint family property was applied. The assessee's later marriage and the birth of children also supported the existence of a Hindu undivided family for the relevant years.

Conclusion: The compensation and the income arising from it were rightly assessable in the hands of the assessee as Hindu undivided family property and not as individual property.

Ratio Decidendi: Where a statute treats compensation for abolition of an impartible estate as joint family property and deems a partition among the sharers, the resulting asset retains its ancestral character in the hands of the sharer and is assessable as Hindu undivided family property when there are coparcenary members.

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