Hindu undivided family ownership under Mitakshara law can satisfy an exemption notification where beneficial holding is established.

Interest on Government securities held by a Hindu undivided family was held exempt under the notification issued under section 60 of the Income-tax Act, 1922, because the securities were in substance held on behalf of the coparceners who fell within the notified class. The SC held that the family's status as a separate unit of assessment did not alter ownership incidents under Mitakshara Hindu law, where coparcenary property is jointly owned with unity of possession and interest until partition. On that basis, the exemption notification applied and the question was answered in favour of the assessee.

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Issues: Whether the interest on Government securities held by a Hindu undivided family was exempt from tax under the notification issued under section 60 of the Income-tax Act, 1922, as interest on securities held by or on behalf of Ruling Chiefs and Princes of India as their private property.

Analysis: The exemption notification covered interest on Government securities held by or on behalf of the specified class of persons. The decisive question was whether the securities, though standing in the hands of a Hindu undivided family, were in substance held on behalf of the Ruling Chief and his brothers within the meaning of the notification. The Court held that the status of a Hindu undivided family as a unit of assessment under income-tax law did not alter the incidents of ownership under Hindu law. In a Mitakshara coparcenary, ownership is joint, with unity of possession and interest extending over the entire property until partition. On that footing, the securities were held on behalf of the coparceners who fell within the notified class.

Conclusion: The exemption applied and the question was answered in favour of the assessee.

Ratio Decidendi: Property held by a Hindu undivided family in a Mitakshara coparcenary may be treated as held on behalf of the coparceners for the purpose of an exemption notification, and the family's status as a separate tax unit does not defeat the exemption where the notified beneficial ownership is otherwise established.

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