Partial partition in HUF property valid where status is severed and shares are defined, excluding assets from net wealth.

A partial partition among members of a larger HUF was recognised where the arrangement severed joint status and defined shares, even though one family asset remained undivided. Under Mitakshara principles, partition can be complete in law upon severance and specification of shares without division by metes and bounds. The later deeds showed that the one-eighth share was divided inter se among the father and his two sons, so it ceased to form part of the smaller HUF's property. Section 20 of the Wealth-tax Act applies only to a complete partition of the family property as a whole, not to a partial partition, and the assets were therefore not includible in the smaller HUF's net wealth.

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Issues: Whether the one-eighth share received by the smaller HUF from the bigger HUF had been validly partitioned by the father and his two sons as a partial partition so as to exclude the assets from the net wealth, and whether section 20 of the Wealth-tax Act, 1957 was attracted.

Analysis: The agreement among the members of the bigger HUF effected a severance of status and defined shares, and the property thereafter stood held as tenants-in-common. The later arrangements and deeds consistently showed that the one-eighth share was divided inter se among the father and his two sons, while one family asset remained undivided. On Mitakshara principles, a partition may be complete upon severance of joint status and definition of shares even without division by metes and bounds. Section 20 applies only to a complete partition of the family property as a whole and not to a partial partition; the authorities under the Wealth-tax Act had therefore to examine the matter without treating section 20 as applicable.

Conclusion: The partial partition was valid, the one-eighth share did not belong to the respondent smaller HUF, and the assets were not liable to be included in its net wealth.

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