HUF Property Character: Joint family assets retain their tax status with a sole coparcener or partition recipient with wife or daughter.

Property already belonging to a Hindu undivided family does not lose its joint family character merely because it is, for the time being, held by a sole surviving coparcener or by a coparcener who has received it on partition and has only a wife or unmarried daughter. Separate property acquired from a father or ancestral source is not, by that fact alone, HUF property; however, property previously impressed with HUF character continues to be assessable as joint family property unless lawfully converted into separate property. On that basis, the income and wealth arising from the property were not assessable in the assessee's individual hands.

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Issues: Whether property which was originally joint family property retains the character of Hindu undivided family property when it comes to the hands of a sole surviving coparcener or a coparcener who has received it on partition and has only a wife or unmarried daughter, and whether such property is assessable in the coparcener's individual hands.

Analysis: The governing distinction is between property that is acquired as separate property and property that was already impressed with the character of joint family property. Property merely acquired from a father or otherwise from an ancestral source does not become Hindu undivided family property simply because the assessee has a wife or daughter. But where the property already belonged to a Hindu undivided family, its character is not altered merely because the family is represented for the time being by one male coparcener. The rights of existing and potential members must be examined, and the temporary reduction of the coparcenary to a single individual does not, by itself, convert joint family property into separate property. On the same principle, property received on partition which had earlier belonged to the family continues to retain its joint family character when the recipient has a wife or unmarried daughter.

Conclusion: The property did not become the assessee's separate property and remained property of the Hindu undivided family. The answer to the reference was therefore against the Revenue and in favour of the assessee.

Final Conclusion: Joint family property retained its Hindu undivided family character in the hands of the assessee in both references, so the income and wealth arising from it were not assessable as the assessee's individual property.

Ratio Decidendi: Property already belonging to a Hindu undivided family does not cease to be joint family property merely because it is held for the time being by a sole coparcener or because the recipient on partition has only a wife or unmarried daughter; its tax character remains that of Hindu undivided family property until it is lawfully converted into separate property.

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