Notional partition under Hindu succession law excludes devolved coparcenary share from HUF income-tax assessment.

On the death of a male coparcener under the Hindu Succession Act, 1956, his interest in Mitakshara coparcenary property is determined by a notional partition immediately before death under section 6 and Explanation 1. The Hindu undivided family continues, but its property is reduced by the deceased coparcener's share, and the income attributable to that devolved share is not assessable as the income of the HUF. The argument based on section 171 of the Income-tax Act, 1961, was rejected because continuity of the family for tax purposes does not prevent recognition of the diminished share passing by succession. Accordingly, the heir-received share was excluded from HUF assessment.

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Issues: Whether, on the death of a male coparcener governed by the Hindu Succession Act, 1956, the share that devolved on his heirs by succession could still be included in the assessment of the Hindu undivided family for income-tax purposes.

Analysis: Under section 6 of the Hindu Succession Act, 1956, read with Explanation 1, the interest of a male Hindu in Mitakshara coparcenary property is determined by assuming a notional partition immediately before death. The Hindu undivided family continues after the death of the coparcener, but its property stands reduced to the extent of the deceased coparcener's share. The income referable to that devolved share is therefore not assessable as the income of the Hindu undivided family. The argument based on section 171 of the Income-tax Act, 1961, was rejected because the continuing existence of the family for tax purposes does not prevent recognition of the diminished share resulting from succession.

Conclusion: The 4/17th share that devolved on the heirs was not includible in the assessment of the Hindu undivided family, and the issue was decided in favour of the assessee.

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