Partition of HUF partnership capital leaves profit rights tied to each share, not exclusive to one coparcener.

On partition of a Hindu undivided family, partnership capital invested by the family was divided equally, and the parties thereafter held those investments as tenants-in-common. In the absence of division by metes and bounds, the future profits attributable to the sons' shares could not be treated as exclusively belonging to the assessee; he was accountable only for the respective divided interests. Clause 5 of the partition deed was construed in context as governing future conduct and matters already accounted for, not as extinguishing the sons' enforceable rights in the profits arising from their capital. Those profits and accretions were therefore excluded from the assessee's net wealth.

---

---

Issues: Whether, on partition of the Hindu undivided family, the future profits from the partnership firms attributable to the sons' shares in the capital investments were exclusively taxable in the assessee's hands, and whether clause 5 of the partition deed displaced the sons' right to those profits for wealth-tax purposes.

Analysis: On the partition, the family capital invested in the partnership firms stood divided in equal shares, and the parties thereafter held those investments as tenants-in-common. In the absence of a division by metes and bounds, the assessee's position after partition was not that of exclusive owner of the whole profits, but of a person accountable for the shares belonging to the divided sons. Clause 5 of the deed was read in its context as dealing with the assessee's future conduct and with matters already brought into account, and not as conferring on him an overriding right to appropriate profits arising from the divided capital. The legal effect of the partition was therefore to give the sons an enforceable share in the profits referable to their capital.

Conclusion: The future profits attributable to the sons' shares did not belong exclusively to the assessee, clause 5 did not extinguish their rights, and those profits and accretions were rightly excluded from the assessee's net wealth.

Ratio Decidendi: Where partition of a Hindu family divides partnership capital but not the business assets by metes and bounds, the resulting profits are attributable to the respective shares in the capital and cannot be treated as exclusively belonging to one coparcener by reason only of a recital in the partition deed.

---