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Issues: Whether, for purposes of wealth-tax assessment, a Hindu undivided family can be treated as disrupted on a mere severance of status or tentative arrangement, or whether partition must be in definite portions by metes and bounds so as to preclude assessment as an HUF for the assessment years concerned.
Analysis: Section 20 of the Wealth-tax Act requires the Wealth-tax Officer to be satisfied that the joint family property has been partitioned as a whole among the members or groups of members in definite portions. The provision does not distinguish between a partition alleged to have occurred before or after the commencement of the Act. A mere division in status, or a tentative allocation of properties pending final division, does not identify definite portions for assessment purposes. The scheme of the Act is that either the HUF is assessed as such or the members are assessed in relation to property definitely allotted to them. Since the final decree dividing the properties by metes and bounds was passed only on 16 March 1961, the alleged disruption did not take effect for wealth-tax purposes during the relevant assessment years.
Conclusion: The question was answered in the negative and against the assessee. The assessments could not be quashed on the footing that the HUF had ceased to exist before the relevant valuation dates, and the family was liable to be assessed as an HUF for the years in question.
Ratio Decidendi: For wealth-tax purposes, a Hindu undivided family continues to be assessable until the joint family property is partitioned as a whole into definite portions by metes and bounds, and a mere severance of status is insufficient to prevent assessment as an HUF.
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