9911796707
TMI Blog1984 (3) TMI 166X X X X Extracts X X X X X X X X Extracts X X X X ..... following genealogical tree : NANJAPPA | ------------------------------------------------------------------------------------------------------------- | | | | Eldest Peda Giddappa Sangappa daughter Sangappa died issueless. (died in 1943) | His wife also | | died after him | --------------------------- | | Mallayya Sivanandam Daughter (Bhagirathamma) born on 24-11-1942 died on 17-6-1958 -------------------------------------------- | | | Sangamesh daughter daughter --------------------------------------------------------------------- Babu | | | | Sangame- Parvathamma Nagamani Sasikala swara Prasad Sangameswara and Sivanandam are two coparceners representing their respective branches in the assessee's HUF. As can be seen, Sivanandam was born on 24-11-1942 and while he was a minor he was looked after by his legal guardian, Smt. Bhagirathamma, who is the mother of Sangameswara Prasad who was the widow of Mallayya. She was discharged as the legal guardian of the minor Sivanandam only in 1966 on his attaining majority. 3. Sivanandam filed a civil suit OS 86 of 1966 on the file of Sub-Court for a general partition of all the joint family properties and for separate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ------------------------------------- Subsequent to the assessment, on enquiries by the Inspector of Income-tax, it came to light that the assessee-HUF sold items 1 and 2 mentioned in the above table in the accounting year relevant to the assessment year 1975-76. However, the capital gains derived by the assessee-HUF resulting from the sales were not disclosed in its return for 1975-76. So also, the enquiries further revealed that items 3 and 4 of the above table were also sold in the accounting year relevant to the assessment year 1976-77 and the capital gains resulting from those transactions also were not disclosed by the assessee-HUF in its return for 1976-77. Then notice under section 148 of the Act was issued to the assessee-HUF on 21-8-1979 intending to bring to tax the resultant capital gains. The notices were served on the assessee on 21-8-1979. 6. At that juncture the assessee-HUF while furnishing a return of income in pursuance of the notice of reopening on 22-9-1979 put forward a claim for partial partition. It is stated that the partial partition was evidenced by an agreement dated 13-6-1974. It is also stated that Schedule ' C ' properties mentioned under the partia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also recorded a finding that the assessee-HUF made a claim for recognition of the partition in the assessment year 1975-76. That means the AAC considered that reopened assessment proceedings under section 147(a) of the Act is synonymous to the assessment proceedings under section 143(3). The ITO who later purported to implement the AAC's order gave opportunity to the assessee-HUF to produce further evidence, if any, in support of its claim for partial partition. The assessee-HUF appeared to have filed a copy of the partition agreement dated 29-3-1978 which is in English and another partition agreement dated 1-11-1980 which is in Telugu. He also recorded statements from Sivanandam as well as Sangameswara Prasad on 28-1-1982. As regards Schedule ' C ' properties as per the partial partition agreement dated 13-6-1974, both of them appeared to have stated as follows : " When asked both the members of the assessee-HUF affirmed in their sworn statements that the properties mentioned in Schedule ' C ' of the partial partition agreement dated 13-6-1974 have not been partitioned by metes and bounds but are enjoyed by them as ' co-owners ' with equal shares instead of as coparceners. In vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ws that they agreed to enjoy them as co-owners, that Sivanandam was to be incharge of those properties and he was given powers to arrange for sale of those properties, and the two coparceners agreed to share the sale proceeds of those properties after their sale and in the meanwhile they wanted to enjoy those properties as co-owners and not as coparceners. According to the learned counsel for the assessee, it is a well-known method of division between the coparceners and it should be held to be valid partition which can be recognised under law. Therefore, according to him, the lower authorities went wrong in not according recognition to such partition. The learned counsel for the assessee also argued that at no time there was any agreement between the two coparceners for an amicable partition of these items of properties and this is made clear in the following portion of the preamble to the partial partition agreement. " Whereas the parties hereto have also been frequently clashing over the division of the other properties described in Schedule ' C ' and held in joint as co-owners, from time to time, ever since they started living separately, as none of the parties hereto wants to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jarat High Court decision and the case on hand. In Govindlal Mathurbhai Oza's case at the time of partition itself the manager of the HUF already executed the agreement of sale in favour of a third party with regard to an item of HUF and as such the property which the HUF sought to be partitioned was only a right to receive consideration under the agreement. But, however, that is not the case here. At the time of partition in this case the house properties were never sold under an agreement or otherwise. After the partition only the houses were sold. Further, there is no scope for the Gujarat High Court to consider the decision of the Supreme Court in Kalloomal Tapeswari Prasad (HUF)'s case as the Gujarat High Court decision was rendered on 16-3-1981 whereas the Supreme Court decision was rendered on 12-1-1982. The purport of the ratio of the Gujarat High Court decision is that the transaction by which the parties agree to divide the sale proceeds of the land for purposes of effecting partition of land was a valid partial partition of the property and the ITO was bound to recognise and record it. As against the above the Supreme Court is categorical in laying down the following law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat all the four executants of the deed together got one-tenth share. The further recitals go to show that they demanded their one-tenth share from the properties. However, it is mentioned in the said deed as the properties do not admit division they relinquished their right after accepting Rs. 15,000 from Sangameswara Prasad. The recitals in the vernacular are as follows : Therefore, from the above recitals of the contemporaneous deed dated 24-5-1974, physical division of the properties is not possible unless we are ready to sacrifice the whole worth of the property or unless we are prepared to render the properties useless. We are unable to agree with this contention. The persons who had relinquished had got only one-fourth in the half share which Sangameswara Prasad had got to his branch. His mother as well as his sisters claimed only under his branch. Virtually, the four persons relinquishing their shares are entitled only to one-twentieth share all put together. Therefore, dividing one-twentieth share or one-eightieth share in the whole in favour of each of the persons relinquishing may result in carving out an insignificant portion of each property which may not carry any co ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
