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Issues:
1. Validity of partial partition and its recognition by the Income-tax Officer. 2. Determination of the existence of two Hindu undivided families. 3. Clubbing of income of the bigger Hindu undivided family with the smaller Hindu undivided family for assessment. 4. Seeking reference under section 256(1) and 256(2) of the Income-tax Act. Detailed Analysis: 1. The judgment revolves around the validity of a partial partition claimed by the applicant, where a Hindu undivided family was reduced to a single coparcenary with two female members. The Income-tax Officer recognized this partial partition under section 171 of the Income-tax Act. The applicant contended that the partial partition was valid and formed a partnership with his mother based on this partition. The Income-tax Officer, however, held that there was only one Hindu undivided family and clubbed the income of both families for assessment. 2. The Tribunal upheld the Income-tax Officer's decision, stating that the partition between the mother and son was not valid. Despite this finding, the Tribunal allowed the appeal, emphasizing that the order recognizing the partial partition should stand until set aside in appropriate proceedings. The Tribunal ruled that the income of the bigger Hindu undivided family could not be clubbed with the smaller family, leading to the applicant's success in the appeal. 3. The Commissioner sought reference under section 256(1) of the Income-tax Act to challenge the Tribunal's decision. The Tribunal rejected the Commissioner's application, prompting the Commissioner to move the High Court under section 256(2) for calling a reference. The High Court, referring to a Supreme Court decision, clarified that in cases where one party's appeal is wholly allowed, that party can seek reference for the negatived contentions. The Court held that the applicant was entitled to seek questions on the validity of the partial partition and its treatment as a family arrangement. 4. The High Court further addressed the procedural aspect of seeking reference under section 256(2), emphasizing that the applicant was not an aggrieved party under section 256(1) and, therefore, was entitled to seek directions from the Court. The Court rejected the opponent's contention that the applicant could not request reference at that stage and allowed the application, making the rule absolute without costs. The judgment clarified the process of seeking reference and the rights of parties in appealing decisions under the Income-tax Act.
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