SOHAN LAL KUKAR Vs. COMMISSIONER OF WEALTH TAX

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal has referred the following question of law arising out of its order dated November 17, 1980, in respect of the assessment years 1974-75 and 1975-76 under Section 27(1) of the Wealth-tax Act, 1957 (hereinafter called "the Act") :

(2.) THE brief facts of the case are that the Hindu undivided family (bigger) consisted of Sohanlal Kukar, karta, Smt. Inder Kukar, wife, Sunil Mohan Kukar and Ramesh Raman Kukar, sons and Miss Sudha and Rainu Kukar, daughters, possessed certain agricultural properties. A partial partition with reference to the agricultural lands was made on December 13, 1963. According to the partial partition, the land was divided and the income arising from these agricultural lands was kept in the joint account in the books of Tilokchand Sohanlal Kukar, THE accumulated balances in this account as on April 12, 1967, were at Rs. 72,067. This amount was divided amongst various members on April 12, 1967. THE Hindu undivided family had other assets also in the form of capital in the firm, Sohanlal Kukar and Sons, where he was a partner. THE capital in the firm, Sohanlal and Sons, on April 12, 1968, was Rs. 79,260. A complete partition of the capital in Sohanlal and Sons was effected on April 12, 1968. THE amount was divided amongst various members as under : <FRM>JUDGEMENT_1001_ITR211_1995Html1.htm</FRM>

(3.) THE arguments of learned counsel have been heard. In the present matter, it is an admitted position between the parties that there was a partition of agricultural land from which the income has arisen which was initially kept in a joint account but was distributed on April 12, 1967. So far as the agricultural land and the income therefrom is concerned, it has been divided between the coparceners/members and the said property or income has not been again thrown in the common fund of the family. THE wife and the minor daughters had formed a Hindu undivided family so far as the income from sources other than the partitioned assets are concerned, but in respect of the partitioned assets all of them have become absolute owners as individual and that character continues. THE accumulated balance from agricultural income and business of the firm, Sohanlal Kukar and Sons was divided between all the members and, therefore, the amount/property which has been received by the members on such partition would retain its character as individual property. THEre may be other assets of the Hindu undivided family which have not been partitioned, the income therefrom shall continue to be Hindu undivided family income in spite of this partial partition of the assets, namely, agricultural land, or income accrued therefrom and capital of the Hindu undivided family of the firm, Sohanlal and Sons. THE assets which have once been given to an individual on partition retains its character as such. In these circumstances, we are of the opinion that the Income-tax Appellate Tribunal was justified in holding that the agricultural lands and accumulated income received at the time of partition of the Hindu undivided family were the individual properties of Shri Sohanlal Kukar and not of the Hindu undivided family consisting of Shri Sohanlal Kukar, his wife and minor daughters.