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Issues: Whether compensation payable to the junior members of a zamindari family under section 45 of the Madras Estates (Abolition and Conversion into Ryotwari) Act, 1948 formed part of the net wealth of the family for wealth-tax purposes.
Analysis: Section 45 treats the compensation scheme as if the impartible estate belonged to a joint Hindu family and provides for division of the balance compensation among the sharers. Section 49 shows that the interest of a person entitled to compensation may devolve on heirs or successors, confirming that the amounts payable to the sons are payable to them in their own right. The compensation paid or payable to the sons was therefore their absolute property, and the holder had no right to reclaim or control it. The statutory fiction created for the limited purpose of the Act could not be extended to treat that amount as the wealth of the holder or the family.
Conclusion: The compensation payable to the sons could not be included in the net wealth of the Hindu undivided family, and the answer was in favour of the assessee.
Ratio Decidendi: Amounts statutorily payable to members of a joint Hindu family as their exclusive share under a compensation scheme are not taxable as the wealth of the family when the statute itself makes those amounts the absolute property of the recipients.
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