HUF status on partition property denied where a sole coparcener and wife alone were not treated as a taxable HUF.

For income-tax purposes, share income from a firm allotted to an individual on family partition was not treated as HUF income where the alleged omitted asset had no factual or legal basis. The right to share profits was regarded as the partner's own property, and the post-partition income arose to the assessee individually. The text also states that a sole coparcener receiving property on partition is the absolute owner until another coparcener exists, and a husband and wife alone do not constitute a Hindu undivided family in relation to that property. Accordingly, the income was assessable in the individual's hands.

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Issues: (i) Whether the share income arising from the firm, after the family partition, continued to belong to the Hindu undivided family because an asset was allegedly omitted from the partition; (ii) Whether the assessee and his wife constituted a Hindu undivided family in respect of the property received on partition so that the income therefrom was assessable as HUF income.

Issue (i): Whether the share income arising from the firm, after the family partition, continued to belong to the Hindu undivided family because an asset was allegedly omitted from the partition.

Analysis: The right to share profits in a firm was treated as the partner's own property and not as an independent asset of the family. After partition, the capital earlier belonging to the family stood allotted to the assessee's share, and the income thereafter arose to him without detriment to family funds. The claim that an asset of the family had been omitted from partition was found to have no factual or legal basis.

Conclusion: The income from the firm was not liable to be assessed as HUF income on the footing of an omitted family asset.

Issue (ii): Whether the assessee and his wife constituted a Hindu undivided family in respect of the property received on partition so that the income therefrom was assessable as HUF income.

Analysis: The expression HUF in the Income-tax Act, 1961 was held to be governed by Hindu personal law, but in the context of taxation and the post-codification Hindu law, a sole coparcener was treated as the absolute owner of property received on partition until another coparcener came into existence. The wife had no proprietary interest in such property and no right to demand partition or share in the income. On that basis, a unit consisting only of the sole coparcener and his wife was not regarded as a HUF for tax purposes in relation to the property received on partition.

Conclusion: The assessee and his wife did not constitute a Hindu undivided family for the relevant property, and the income was correctly assessed in the hands of the assessee as an individual.

Final Conclusion: The tax treatment made by the authorities was upheld, and the assessee's claim to HUF assessment failed.

Ratio Decidendi: For income-tax purposes, a sole coparcener in possession of property received on partition is the absolute owner until another coparcener exists, and a husband and wife alone do not constitute a HUF in relation to such property; income from it is assessable as the individual income of the coparcener.

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