Recognised partial partition and genuine transfer excluded family funds from net wealth computation

A recognised partial partition led to a transfer of funds to the karta's daughters, and the High Court treated the transfer as effective for wealth-tax purposes. The Department had accepted the partial partition, the interest on the deposited amounts was not assessed as the Hindu undivided family's income, and there was no evidence that the family retained control over the money merely because the entries appeared in the books. On that basis, the amount of Rs. 60,000 was held not includible in the net wealth of the Hindu undivided family, and the Tribunal's finding was upheld.

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Issues: Whether the sum of Rs. 60,000, transferred pursuant to a recognised partial partition and credited in the names of the karta's daughters, could be included in the net wealth of the Hindu undivided family.

Analysis: The partial partition stood recognised by the Department, the interest on the deposited amounts was not assessed as income of the Hindu undivided family, and there was no evidence discrediting the genuineness of the transfer or showing that the family retained control over the funds merely because the entries were made in the books of account.

Conclusion: The amount of Rs. 60,000 was not includible in the net wealth of the assessee-Hindu undivided family and the finding of the Tribunal was upheld.

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