Hindu Undivided Family status applies after merger where ancestral property remains taxable under personal law despite earlier individual returns.

After the merger of a former princely State, the former ruler ceased to be a sovereign and became subject to Hindu personal law, so ancestral properties were assessable in the status of a Hindu Undivided Family rather than as an individual. The assessee's earlier returns as an individual and subsequent dealings with some properties did not determine the correct tax status or create an estoppel against asserting it. Because the properties were ancestral in origin and the assessee was Hindu, the proper status after merger was that of a HUF with his legal heirs, and the revenue's objection failed.

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Issues: Whether, after the merger of the former princely State, the assessee's status for income-tax purposes was that of an individual or a Hindu Undivided Family, and whether his earlier returns and dealings with the property precluded him from asserting the correct status.

Analysis: The property of the Jaipur ruler was treated as belonging to a kingdom and not as an impartible estate in the technical Hindu law sense. Before the merger, the ruler was an absolute sovereign and was not governed by Hindu personal law. After the merger, he ceased to be the ruler and became an ordinary citizen, with the result that Hindu personal law applied to him. Since the assessee was a Hindu and the properties were ancestral in origin, his status after merger was that of a Hindu Undivided Family with his legal heirs. The fact that he had earlier filed returns as an individual, or had disposed of some properties after merger, did not conclude the legal issue or operate as an estoppel against claiming the correct status.

Conclusion: The assessee's correct status was that of a Hindu Undivided Family, not an individual, and the revenue's objection failed.

Ratio Decidendi: When a former sovereign ceases to rule on merger and becomes subject to personal law, the income from ancestral properties is assessable in the status in which that personal law places the family, and prior mistaken treatment of the status does not bar the correct legal classification.

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