A CRITICAL REVIEW OF

COMMISSIONER OF
WEALTH TAX, KANPUR v.
CHANDER SEN
(AIR 1986 SC 1753)
AKSHITA MITTAL
UG2016-06
 FACTS OF THE CASE
• Rangi Lal and his son, Chander Sen, constituted a Hindu undivided family.
• On October 10, 1961, there was a partial partition by which the business
was divided between the father and the son, and, thereafter, it was
carried on by a partnership consisting of the two.
• The firm was being assessed to income-tax as a registered firm and the
two partners were being separately assessed in respect of their share of
income, while the house property of the family continued to remain joint.
• On July 17, 1965, Rangi Lal died leaving behind his son, Chander Sen, and
his grandsons.
• On his death there was a credit balance of Rs. 1,85,043 in his account in
the books of the partnership firm.
• For the assessment year 1966-67, Chander Sen, who constituted a joint
family with his own sons, filed a return of his net wealth which did not
include the credit balance devolved on him.
 PROCEDURAL HISTORY
Income Tax and
Wealth tax
commissioner Income-tax Appellate
Tribunal

Supreme Court

High Court of
Judicature at
Allahabad
 ISSUE RAISED

Whether the income or asset which a son inherits from his father
when separated by partition should be assessed as income of the
HUF of son or his individual income?
 JUDICIAL DECISION

QUORAM: Hon’ble Justice R.S. Pathak and Hon’ble Justice

Sabyasachi Mukharji.

• Gujarat High Court (1977)

• Madras High Court (1978)
• Madhya Pradesh High Court (1982)
• Andhra Pradesh High Court (1983)

VERDICT: Upheld Allahabad High Court’s decision.

 CRITICAL ANALYSIS

• This case changed the legal position about the nature

of the property inherited. It overruled the traditional
view of Hindu Law.
• Critique of different High Courts across the country.
• Reaffirmed by the Supreme Court in Yudishter v.
Ashok Kumar (1987)
• Should be governed by Indian Partnership Act, 1932.
• Ignored S. 6 of Hindu Succession Act, 1956.
 RECENT DEVELOPMENT:

Bhanwar Singh v. Puran

(2008) along with different
High courts’ decisions.

OP
PO
E V SIT
IEW

Ass Kaur (Smt.)

(Deceased) by LRs v.
Kartar Singh (Deceased)
by LRs (2007)