9911796707
TMI Blog1978 (4) TMI 120X X X X Extracts X X X X X X X X Extracts X X X X ..... payable by the HUF on that account. After setting off this amount the net value of the properties came to Rs. 99,335. After providing a sum of Rs. 19,867 for the marriage and maintenance of Aradhana Mathur, the balance of Rs. 79,468 was equally divided amongst the other members of the family, namely, Shri Mathur, Smt. Kamal Mathur, Shri Rajiv Mathur and minor Ajay Mathur. A partition deed was also drawn up on1st Oct., 1974which was registered with the Registrar on24th Dec., 1974. The relevant clauses of the deed giving details of the partition are as under: "7. That after setting a part 1/2 share of the office flat No. C-93, 9th Floor,HimalayaHouse. Kasturba Gandhi Marg, New Delhi of the value of Rs. 45,250 and 1/2 of maintenance security of Rs. 750 making a total of Rs. 46,000 and subject to the payment of liabilities of Rs. 26,133 for the maintenance and marriage expenses of Aradhana Mathur, daughter of Mr. Gulab Singh Mathur, Mrs. Kamal Mathur, the net value of remaining properties and assets, subject to deduction of liabilities have been divided in four equal shares between Mr. Gulab Singh Mathur, Mrs. Kamal Mathur, Rajiv Mathur and Ajay Mathur (minor). 8. (a) That Flat No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the partition became the owners of their shares. Similarly note was also taken of by Loke Nath Co.(Construction) and M/s. Kailash Nath Associates of the same. 3. In the course of assessment proceedings for the asst. yr. 1974-75 the assessee claimed before the ITO that an order under s. 171 of the Act be passed in its case and the fact of partial partition be recognised by him. The ITO rejected the claim. The grounds for such rejection were that even after partial partition the family was common in mess, that there was no physical division of the properties in question that considerable portion of Himalaya House and Kanchanjanga properties were kept joint, that intimations to Loke Nath Co. (Construction) and Kailash Nath Associates were sent long after the date on which the partition was claimed to have been made and finally that no separate numbers were allotted by the Municipal authorities to the alleged divided properties. The ITO was of the opinion that as the properties admitted of a physical division their physical division was necessary within the meaning of expression "partition" as laid down in Expln. to s. 171 of the Act. The said explanation reads as under: a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee's claim in terms of s. 171 of the Act. 5. It is against the above findings to the AAC that the Department has filed this appeal. Shri B. Gupta, the Deptl. Representative, did not dispute the fact that the deed of partition dt1st Oct., 1974had been duly registered or that the original owners of Himalaya House and Kanchanjanga as well as the Municipal authorities had been duly informed. His submission was that there proceedings were immaterial in view of the fact that the assessee had failed to carry out the partition as it was defined in the Expln. to s. 171 of the Act. His grievance was that the properties in question were immovable properties which admitted of a physical division and, therefore, a physical division should have been carried out for them. His objection in particular was to the flats in Himalaya House and Kanchanjanga. He contended that the division of these two flats amongst the respective members of the family had been made only in maps and in the partition deed dt.1st Oct., 1974, or there was only a division of income which was not sufficient to constitute partition in terms of the said explanation. He pointed out that the action of the assessee might am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The issue before us is a short one. There is no dispute that the assessee has to comply to the definition of the expression "Partition" as it appears in the Expln. to s. 171 of the Act. It was also not denied before us that the two flats in Himalaya House and Kanchanjanga were not subjected to physical division. It was of course submitted that a physical division was carried out with regard to Hauz Khas property. The question for our consideration, therefore, is whether the two flats in question could be said to be of such a nature which did not admit of a physical division and further whether Hauz Khas property was subjected to a physical division or whether the whole of that property or any portion thereof also did not admit of a physical division. We have already noticed above that the flats in Himalaya House and Kanchanjanga had been let out to tenants long before the assessee carried out partial partition on1st Oct., 1974. Had the letting out been done after1st Oct., 1974one could possibly argue that actual physical division of the two flats should have done. Effecting of a physical division on1st Oct., 1974obviously meant inconvenience to the tenants which might have resulte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether after the ITO had made an order under s. 25A(1) of the Act of 1922, the matter could be reopened by the other ITO in the case of some of the members of the HUF, who were holding the properties as joint tenants. In the case of N.K. Sarada Thampathy also a different point was involved as to whether the income could still be assessed in the hands of the family in whose case the partition had taken place long before the relevant accounting period. We are, however, of the opinion that the following observations as appearing at page 1696 of the commentary on the Law of Income-tax by Sampath Iyengar do support the stand of the assessee: "Division 'as the property admits of'. The definition does not always require a physical division, however, inconvenient or impracticable it might be. The expression 'where the property admits of a physical division' denotes that the property should be capable of division. The word 'admits' in the context means 'capable of' and the capability has to be judged with reference to the subject matter of the property, its character and the use to which it is being put to by the members of the joint family. Accordingly, the decisions which have held tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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