Dayabhaga inheritance and wealth-tax: heirs take defined shares individually, not as joint HUF wealth.

Under the Dayabhaga school, heirs of a deceased Hindu male take defined shares in inherited property, with unity of possession but not unity of ownership. Each heir is therefore owner of his or her own share, and that share is not jointly assessable as the wealth of an HUF. For wealth-tax purposes, the relevant shares, if taxable at all, are assessable in the individual hands of the heirs under Section 3 of the Wealth-tax Act. On that footing, the HUF assessments were treated as illegal and void and were cancelled.

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Issues: Whether the wealth-tax assessments made on the assessee, an HUF governed by the Dayabhaga school, were valid when the properties inherited by the heirs of a Hindu male were not jointly assessable in the status of an HUF.

Analysis: The governing principle applied was that, on the death of a Hindu male governed by the Dayabhaga school, the heirs take defined shares in the property. The coparcenary has unity of possession but not unity of ownership, so each heir is owner of his or her share. Such shares are liable, if at all, to be assessed in individual hands under Section 3 of the Wealth-tax Act, not as joint wealth of an HUF.

Conclusion: The assessments on the HUF were illegal and void and were cancelled.

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