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The Bombay High Court in the case of CIT v. J. R. Lalwani(108TAX413) reiterated the well settled law laid down by the Supreme Court in the case of CWT. V. Chander Sen(161ITR370/27TAX330) in the context of a declaration made by a widow that after the death of her husband she becomes partner on behalf of joint family consisting of herself and her sons and claimed that her share income from firm should be assessed in the hands of HUF and not in her hands in individual capacity. Both the AO and Commissioner(Appeals) did not accept the assessees contention. However, the Tribunal accepted the assessees contention in view of the decision in ITO v. S.R. Kirloskar (8ITD288)wherein following the decision of the Gujarat High Court in CWT v. Harshadlal Manilal (97ITR86) and CIT v. Dr. Bapubhai (108ITR417), it was held that even after coming into force of the Hindu Succession Act, 1956, in a case where a Hindu dies intestate leaving behind self – acquired and separate property , the character of such property would be that of ancestral property and such property would be HUF property. Following the Supreme Court ruling in 161ITR370 the High Court held that the Gujarat High Court decision is no more good law after the decision of the Supreme Court and the mere declaration by the assessee that she was a partner in the firm on behalf of the joint family consisting of herself and her sons, could not change her real status which was individual and not HUF. Moreover the Court held that even assuming that the declaration was a gift of her share in the firm to the HUF, there was nothing to show that on that day any HUF did , in fact, exist or/and even if it was so existing,the gift was accepted by it.

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