Impartible estate income remains the holder's separate income and is not taxable as Hindu undivided family income.
Income derived from an impartible estate is the separate income of the holder for the time being and is not treated as Hindu undivided family income merely because the holder is also a member or manager of a joint family. The character of impartible estate property differs from ordinary joint family property, so property income, business income, and income from quarries and fisheries arising from such an estate remain taxable in the holder's individual hands. The exemption for receipts by a member of a Hindu undivided family applies only to sums received as such from family income in which a vested share exists, not to income accruing by reason of holding the impartible estate. Individual assessment was upheld.
Issues: Whether the income derived from an impartible estate, consisting of property income, business income and income from quarries and fisheries, was taxable in the hands of the holder as an individual or in the hands of the Hindu undivided family as family income.
Analysis: The income from an impartible estate is treated as the absolute income of the holder for the time being. The incidents of an impartible estate differ from those of ordinary joint family property, and the fact that the holder is also a member or manager of a Hindu undivided family does not by itself convert such income into family income. The exemption for sums received as a member of a Hindu undivided family applies only where the receipt is as such member out of family income in which there is a vested share, not where the income arises to the holder because he is the holder of the impartible estate.
Conclusion: The income in question was correctly assessed in the hands of the assessee as an individual and not as income of the Hindu undivided family.
Final Conclusion: The reference was answered against the assessee and the individual assessment was upheld.
Ratio Decidendi: Income derived from an impartible estate is the separate income of the holder and is not assessable as Hindu undivided family income merely because the holder belongs to or manages a joint family.
TaxTMI 
AI Drafter ✕
TaxTMI 
