Inherited property used for partnership capital remained individual property, so the resulting loss was personal and not HUF loss.

Property inherited by a son after an accepted prior partition and devolving under section 8 of the Hindu Succession Act, 1956, is treated as his individual property. Where the capital invested in a partnership firm came from that inheritance, the asset did not acquire Hindu undivided family character merely because the assessee had sons. The partnership share therefore remained the assessee's separate property, and any loss arising from it was his personal loss, not a loss of the Hindu undivided family.

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Issues: Whether the assessee's share in the partnership firm, acquired out of inherited funds, constituted his separate and individual property or the property of the Hindu undivided family consisting of himself and his sons.

Analysis: The property in question was inherited by the assessee after a prior partition had already been accepted under the earlier income-tax regime. On the death of the father, the inherited sum devolved under section 8 of the Hindu Succession Act, 1956, and the Court followed the view that property so inherited by a son from his father, after separation, is held by him as his individual property. Since the capital invested in the partnership came from that inheritance, the character of the asset remained personal to the assessee and did not acquire the character of joint family property merely because he had sons.

Conclusion: The assessee's share in the partnership was his separate and individual property, and the resulting loss was his personal loss, not the loss of the Hindu undivided family.

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