Inherited shares become a Hindu widow's absolute property under section 14(1), so dividend income is assessable in her hands.

Dividend income from shares inherited by a Hindu widow was treated as arising from her absolute property under section 14(1) of the Hindu Succession Act, 1956. The widow's limited interest was regarded as enlarged into full ownership, so the income followed the ownership of the shares and was assessable in her hands. On the facts, the income was not attributable to the Hindu undivided family, as the property had ceased to be HUF property for tax purposes once it became the widow's absolute property.

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Issues: Whether dividend income from shares inherited by a widow was her absolute property under section 14(1) of the Hindu Succession Act, 1956, and therefore assessable in her hands rather than in the hands of the Hindu undivided family.

Analysis: The dividend income arose from shares that had become the widow's property after the death of her husband. Applying section 14(1) of the Hindu Succession Act, 1956, the Tribunal treated the widow's interest as enlarged into absolute ownership. On the facts found, the income derived from those shares followed the ownership of the property and was not attributable to the Hindu undivided family.

Conclusion: The dividend income was assessable as the absolute property of the widow and not in the hands of the assessee-Hindu undivided family.

Ratio Decidendi: Property inherited by a Hindu widow and falling within section 14(1) of the Hindu Succession Act, 1956 becomes her absolute property, and income arising from such property is assessable in her hands.

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