Absolute ownership on partition bars HUF status for wealth-tax, even if future adoption remains possible.

A Hindu widow who became absolute owner of property on partition could not be assessed in the status of a Hindu undivided family for wealth-tax merely because she was competent to adopt a son later. The property vested in her absolutely under section 14 of the Hindu Succession Act, and section 12(c) of the Hindu Adoptions and Maintenance Act prevents a later adoption from divesting an estate already vested. As no coparcenary or joint family property survived in her hands, the possibility of a future adoption did not create an existing HUF. The issue was answered in the negative and against the assessee.

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Issues: Whether the assessee, a Hindu widow who had become absolute owner of the property on partition and had only an unmarried daughter, could be assessed in the status of a Hindu undivided family for wealth-tax purposes merely because she was competent to adopt a son in future.

Analysis: On partition, the property allotted to the assessee became her absolute property under section 14 of the Hindu Succession Act, 1956. Though section 8 of the Hindu Adoptions and Maintenance Act, 1956 permits a female Hindu to adopt, proviso (c) to section 12 makes it clear that an adopted child does not divest any person of an estate that had already vested before adoption. The Court distinguished the authorities dealing with subsisting joint family property and held that those principles do not apply where the widow is already the absolute owner and no coparcenary or joint family property survives in her hands. The possibility of a future adoption does not create an existing Hindu undivided family for wealth-tax purposes.

Conclusion: The assessee was not entitled to be assessed as a Hindu undivided family; the question was answered in the negative and against the assessee.

Ratio Decidendi: A Hindu widow who has become the absolute owner of property cannot be treated as constituting a Hindu undivided family merely because she may adopt a child later, since adoption does not divest vested ownership or create joint family property in the absence of a subsisting coparcenary.

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