Notional partition and assessed tax liability govern net wealth computation; only the assessee's actual share in joint family assets was taxable.

Deduction in net wealth computation was confined to tax finally determined on assessment, not the lower amount shown on the return, because only the assessed liability reflected the actual tax payable. On succession under section 6 of the Hindu Succession Act, 1956, a deceased coparcener's interest was notionally partitioned immediately before death and devolved on the heirs in defined shares; thereafter the heirs and the Hindu undivided family held the property as tenants-in-common. Only the assessee's actual share in the joint family assets, including jewellery, could be included in net wealth, and the excluded share was not assessable.

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Issues: (i) Whether the deduction in computing net wealth was to be taken with reference to the tax payable on the basis of the return or the tax finally determined on assessment; (ii) Whether, after the death of a coparcener governed by the Hindu Succession Act, 1956, the deceased coparcener's share in joint family property devolved on the heirs so that only the surviving family's reduced share could be brought to wealth-tax, including the jewellery item in question.

Issue (i): Whether the deduction in computing net wealth was to be taken with reference to the tax payable on the basis of the return or the tax finally determined on assessment.

Analysis: The deduction had to reflect the actual tax liability as finally ascertained on assessment. The amount computed merely on the basis of the return did not represent the final liability for wealth-tax computation.

Conclusion: The deduction was admissible only in respect of tax as finally determined on assessment, and not tax computed on the return.

Issue (ii): Whether, after the death of a coparcener governed by the Hindu Succession Act, 1956, the deceased coparcener's share in joint family property devolved on the heirs so that only the surviving family's reduced share could be brought to wealth-tax, including the jewellery item in question.

Analysis: Section 6 of the Hindu Succession Act, 1956, read with the proviso and Explanation 1, creates a notional partition for the limited purpose of ascertaining the deceased coparcener's share, which then devolves by succession on the heirs. The fiction does not continue coparcenary ownership in the heirs; the heirs and the Hindu undivided family hold the property as tenants-in-common in defined shares. Accordingly, each item of property, including jewellery, is held in undivided shares and only the assessee's actual two-thirds share could be included in net wealth.

Conclusion: The deceased coparcener's share had to be excluded from the assessee's net wealth, and only the assessee's two-thirds share in the jewellery was liable to be included; that share being below the exemption limit, it was exempt under section 5(1)(xiv).

Final Conclusion: The reference was answered in a manner adverse to the revenue and the assessee succeeded on the material questions of law.

Ratio Decidendi: For purposes of succession under section 6 of the Hindu Succession Act, 1956, the deceased coparcener's interest is ascertained by a notional partition immediately before death and devolves on the heirs in a defined share, so that the heirs and the Hindu undivided family thereafter hold the property as tenants-in-common and only the assessee's actual share can be assessed.

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