1982 (2) TMI 93 - AT - Income Tax

Summary

Issues:
Validity of partial partition claimed by the assessee HUF and rejection by the ITO and AAC, applicability of tax on income post partial partition, validity of provision for marriage expenses in partial partition.

Analysis:
The appeals filed by the assessee HUF challenged the rejection of the partial partition claim by the ITO and AAC. The HUF claimed a partial partition involving fixed deposits, dividing them among the Karta, his wife, and minor son, with a provision for the minor daughter's marriage expenses. The ITO rejected the claim citing invalidity due to minor son's inability to consent and the father's role as Karta. The AAC upheld the rejection, stating marriage expenses provision couldn't be made in a partial partition. The assessment treated the income as if no partition occurred.

The HUF argued the partial partition was genuine and valid, supported by consent of all members. They contended that even if a share was allotted to a person not entitled, it didn't invalidate the partition. Citing legal precedents and tribunal decisions, they emphasized the validity of the partial partition and marriage provision. The Revenue argued lack of partition details, minor son's signature absence, and necessity for partition benefit. Referring to court decisions, they contended the partition and marriage provision were invalid.

Upon considering arguments and legal precedents, the Tribunal found the partial partition valid. The deed was signed by the Karta on behalf of all members, including the minor son and daughter, with consent for the minor's benefit. Legal decisions supported the validity of such partitions and provisions. The Tribunal disagreed with the Revenue's objections and held the HUF had established a valid partial partition deserving recognition. Consequently, the assessment of the HUF was to be modified in line with the recognized partition.

In conclusion, the appeals filed by the assessee HUF were allowed, with the Tribunal recognizing the validity of the partial partition and directing modifications to the assessment accordingly.