TaxTMI 
TaxTMI 
1997 (4) TMI 1
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.... separate. On April 7, 1954, she filed a suit [O. S. No. 47 of 1954] for partition in the court of the Subordinate Judge, Tenali. In the said suit, Smt. Mahalakshmamma on behalf of herself and her two minor sons filed a written statement on October 27, 1954, agreeing to the division of all the family properties into four equal shares. On attaining majority, Raja as well as Satyanarayana Murthy, filed written statements making similar request. On the basis of a compromise between the parties a preliminary decree for partition was passed in the said suit on April 1, 1956. The final decree was passed in the suit on March 16, 1961. The present appeals relate to the assessment years 1958-59, 1959-60 and 1960-61. In respect of these years returns were filed by the assessee as a Hindu undivided family consisting of three members, namely, Smt. Mahalakshmamma and her sons, Raja and Satyanarayana Murthy. The Wealth-tax Officer made the assessment on the basis that there was no partition by metes and bounds and that the Hindu undivided family consisted of four members including Smt. Raja Syamala and the properties allotted to Smt. Raja Syamala were included in the joint properties of the Hind....
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....opinion of the High Court of Andhra Pradesh (see [1983] 143 ITR 441, 443) : " Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is justified in cancelling the wealth-tax assessments for the years 1958-59, 1959-60 and 1960-61 ? " The said question has been answered by the High Court by the impugned judgment dated August 26, 1982, in favour of the Revenue and against the assessee. The High Court has held that having regard to the language of sub-section (1) of section 20, no distinction can be made between a case where the partition is alleged to have taken place before the commencement of the Act and where the partition is said to have taken place after the commencement of the Act. The idea behind section 20 of the Act is that unless the joint family properties are divided into definite portions and allotted to each individual member, it cannot be said that a particular member can be assessed with respect to particular properties. If it is contended that a mere division in status is sufficient for the purpose of putting an end to the Hindu undivided family, even for the purpose of the Act, the resultant situation would be that, while the Hindu und....
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....ommon ownership with definite shares in that property. But for the purpose of assessment of income-tax and wealth-tax, the Legislature has imposed the requirement that for a partition in a Hindu undivided family, it is necessary that the joint family property should be partitioned among the various members or groups of members in definite portions. The rationale for the introduction of section 25A in the Indian Income-tax Act, 1922, has been thus explained by Venkatarama Aiyar J. in Lakhmichand Baijnath v. CIT [1959] 35 ITR 416 (SC) : " That section was, it should be noted, introduced by the Indian Income-tax (Amendment) Act, 1928 (3 of 1928), for removing a defect which the working of the Act as enacted in 1922 had disclosed. Under the provisions of the Act as they stood prior to the amendment, when the assessee was an undivided family, no assessment could be made thereon if at the time of the assessment it had become divided because at that point of time, there was no undivided family in existence which could be taxed, though when the income was received in the year of account the family was joint, nor could the individual members of the family be taxed in respect of such incom....
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.... Hindu undivided family will have no interest in the coparcenary property of the Hindu undivided family of which he was a member and sub-clause (ii) of section 5(1) of the Act would be no bar for assessment in respect of the properties in the hands of the erstwhile members of the Hindu undivided family even though the properties have not yet been divided amongst the members in definite portions. The High Court has further held that sub-section (2) of section 20 would not be attracted where no prior assessment had been made of the assessee as a Hindu undivided family under the Act because in that event there is no question of the family continuing to be liable to be assessed as such under sub-section (2) of section 20. In Goswami Brijratanlalji Maharaj v. CWT [1971] 79 ITR 373 (Guj), after taking note of the reasons given by the Calcutta High Court in Shri Srilal Bagri v. CWT [1970] 77 ITR 901, the learned judges of the Gujarat High Court have pointed out that the words "not previously assessed" occurring in section 25A of the Indian Income-tax Act, 1922, have been omitted from section 20 of the Act and the Legislature has merely used the words "where at the time of making an asses....