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Issues:
1. Interpretation of partial partition agreement dated April 1, 1971. 2. Assessment of share income from partnership firm for the assessee. Analysis: The case involved the interpretation of a partial partition agreement dated April 1, 1971, concerning the share income from a partnership firm. The assessee, as karta of a Hindu undivided family (HUF), was a partner in the firm. The Income-tax Officer assessed the entire income from the partnership in the hands of the assessee, his wife, and two minor sons, treating them as a sub-partnership under section 183(b) of the Income-tax Act, 1961. The Tribunal, however, ruled in favor of the assessee, leading to the reference of two questions to the High Court for opinion. The first question revolved around the validity of the partial partition agreement and the creation of an overriding title in favor of the wife and minor sons of the assessee. The High Court, considering a previous decision, held that the overriding title created in the partition deed prevented the inclusion of the share income of the wife and minor sons in the assessee's income. The absence of a specific order from the Income-tax Officer granting partial partition did not alter this conclusion, as the substance of the order indicated acceptance of the partial partition. Therefore, the argument by the Revenue was rejected, and the first question was answered in favor of the assessee. The second question concerned the assessment of the share income from the partnership firm. The High Court determined that the Income-tax Officer's acceptance of the partial partition implied that the income was to be assessed in the hands of the assessee, rather than the Hindu undivided family. Consequently, the High Court answered the second question in favor of the assessee as well. The judgment favored the assessee on both issues, and costs were awarded against the Revenue.
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