Partial partition - Definition / Legal Terminology - Income Tax

Explanation (b) - In section 171 of the Income tax Act 1961- Partial partition means- a partition which is partial as regards the persons constituting the Hindu undivided family, or the properties belonging to the Hindu undivided family, or both. MV VALLIAPPAN AND OTHERS VERSUS INCOME-TAX OFFICER AND OTHERS- [ 1988 (1) TMI 29 - MADRAS HIGH COURT] ....................applying the ratio of McDowell's case 1985 (4) TMI 64 - SUPREME COURT , if a partial partition has to be rejected on the ground that it is a dubious device to reduce the tax burden, it would not be permissible to reject the partial partition without making any enquiry as to the genuineness or otherwise of the partial partition. It is also to be borne in mind that the right to ask for a partial partition is the right of the individual member of the Hindu undivided family. Where an individual member of a Hindu undivided family exercises his legal right to have partial partition effected in respect of some property belonging to the Hindu undivided family, the said partition cannot be termed as a device adopted by the Hindu undivided family which is the assessee. The right to partial partition being inherent in the member of the Hindu undivided family, the Hindu undivided family has no right to resist the demand for a partial partition and, therefore, the Hindu undivided family as an assessee cannot be charged with resorting to a dubious device for the purposes of tax avoidance. It is, therefore, abundantly clear that the validity of section 171(9) cannot be sustained on the ground that it is measure to counteract the tendency to tax avoidance. Consequently, inasmuch as the income which does not belong to the Hindu undivided family but in fact and in law belongs to a member of the Hindu undivided family consequent upon a partial partition, is brought to tax in the hands of the Hindu undivided family, the provision in section 171(9), in our view, necessarily suffers from legislative incompetence. .........................There is no rationale behind treating the two sets of the Hindu undivided families, one, which was an assessee prior to the assessment year 1980-81, and the other which is not an assessee and becomes an assessee after the assessment year 1980-81 differently in so far as the partial partition and the income of the separated member from the property which he acquires as a result of the partial partition are concerned.