TaxTMI 
TaxTMI 
1979 (6) TMI 98
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....said income belonged to the assessee in the status of HUF and it was not includible in his individual hands because this property originally belonged to the assessee's father consequent to a partition between the assessee's father Shri Subramania Mudaliar and his sons, including the assessee and, therefore, it was joint family property, the income from which was includible only in the hands of the assessee's HUF and not in his individual hands. The ITO did not agree with this contention because he found that according to the terms of the settlement deed dt. 5th Feb., 1954, executed by the father of the assessee in favour of the assessee's mother and two sisters, the mother had life interest in the properties and after her death the properti....
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....individual. Hence this appeal by the Department against the AAC's order and the cross objection by the assessee in support of the AAC's order. 4. The arguments of the Departmental Representative before me were that though the deceased mother had a life interest in the property, nevertheless, she also had disposing powers which is an important factor to show that she became the absolute owner of the property and she could have willed away the property to anyone and in such a state of things, the property ceased to be ancestral property and therefore, when the heirs inherited such a property, it became individual property in the hands of each of the heirs. 5. The assessee's counsel, on the other hand, contended that the AAC had rightly appr....
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.... be ancestral property after the settlement. For answering this question, it is necessary to go to the settlement deed from which only the intention of the settlor has to be gathered. It is not disputed that the properties have to be divided among the respective three sons and their respective heirs assessment equally in three shares as such distribution arises from the settlement deed. It is clear from the settlement deed that this intention was that after the death of his wife the properties should go to his three sons and their respective heirs. Therefore, the sons and their respective heirs were to get the property only through the settlement deed. Further, if the settlor wanted that the properties, in case they remained after his wife'....