Dayabhaga coparcenary property income must be assessed in individual shares, not as HUF income.

Under Dayabhaga law, coparceners hold defined and ascertainable shares in house property even though possession remains joint until partition. In that setting, the house property income is taxable separately in the hands of the individual coparceners in proportion to their respective shares, rather than as income of the Hindu undivided family. Applying the scheme of section 9(3) of the Indian Income-tax Act, 1922 and section 26 of the Income-tax Act, 1961, the property income was excluded from the assessee-HUF's total income.

---

---

Issues: Whether the income from house property held by coparceners governed by the Dayabhaga school, in which their shares were defined and ascertainable but possession remained joint, was assessable in the hands of the Hindu undivided family or had to be assessed separately in the individual hands of the coparceners in proportion to their shares.

Analysis: Under Dayabhaga law, coparceners have defined shares in the property and are owners of those shares, though their possession remains joint until partition. In such a situation, the statutory scheme under section 9(3) of the Indian Income-tax Act, 1922 and section 26 of the Income-tax Act, 1961 applies to house property income. The consistent view accepted in earlier decisions was that income from house properties in joint possession of Dayabhaga coparceners is not assessable as the income of the Hindu undivided family as such, but must be brought to tax separately in the hands of the members according to their respective shares.

Conclusion: The income from the property in question was not assessable in the hands of the assessee-Hindu undivided family and had to be excluded from its total income; the answer was in favour of the assessee.

---