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Issues: (i) Whether property inherited by a son from his deceased father, after the Hindu Succession Act, 1956 came into force, is to be treated as the individual property of the son or as joint family property of the Hindu undivided family consisting of the son, his wife and his son. (ii) Whether the assessee was liable to be assessed in the status of a Hindu undivided family.
Issue (i): Whether property inherited by a son from his deceased father, after the Hindu Succession Act, 1956 came into force, is to be treated as the individual property of the son or as joint family property of the Hindu undivided family consisting of the son, his wife and his son.
Analysis: The governing principle applied was that the Hindu Succession Act, 1956 does not abrogate the pre-existing Hindu law regarding the character in which a son receives property from his deceased father under Mitakshara law. The son does not take such property as absolute individual property merely because succession opened after the Act. Where the son is already a member of a Hindu undivided family with his wife and son, the inherited property retains the character of joint family property.
Conclusion: The property left by the assessee's father was rightly held to be the property of the Hindu undivided family and not the individual property of the assessee.
Issue (ii): Whether the assessee was liable to be assessed in the status of a Hindu undivided family.
Analysis: On the facts found, the assessee constituted a Hindu undivided family along with his wife and son. Since the inherited property formed part of the joint family property, the correct assessable status for wealth-tax purposes was that of the Hindu undivided family and not that of an individual.
Conclusion: The direction to assess the assessee in the status of a Hindu undivided family was justified.
Final Conclusion: Both referred questions were answered in favour of the assessee and against the Revenue, confirming HUF treatment for the inherited property and the assessee's assessable status.
Ratio Decidendi: Property inherited by a son from his deceased father under Mitakshara law, even after the Hindu Succession Act, 1956, assumes the character of joint family property where the son is already part of a Hindu undivided family, and the assessable status must follow that character.
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