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TMI Blog1983 (11) TMI 143X X X X Extracts X X X X X X X X Extracts X X X X ..... artners in the assessee-firm. Sri K.A.B. Sambasiva Rao and K. Paidisetty were the two among the five partners of the assessee-firm. The case of the assessee was that in pursuance of a partial partition which was purported to have taken place in the families of both the above said partners on 31st Mar, 1979, the business capital standing in the accounts of the firm in the respective names of Sri. K.A.B. Sambasiva Rao and K. Paidisetty were partitioned among the joint family members. Master. K. Sairam and Master K.V. Parvateesam are the sons of K. Paidisetty and Master K. Viswanadham and Master K.V. Satteyya are sons of Sri. K.A.B. Sambasiva Rao. The amounts which fell to the shares of two above said minor sons of K. Paidisetty and two above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, the amount is added back to the income of the assessee-firm and it went into computation of the total income of the firm at Rs. 1,02,180. 3. The assessee-firm aggrieved by the assessment order dt. 12th Aug,1981 appealed before the CIT(A). The assessee was not successful before the CIT(A) who confirmed the order of the ITO by means of his appellate order dt, 16th Mar, 1982. 4. Now the assessee came up in second appeal before this Tribunal. Having been aggrieved by the impugned orders passed by the CIT(A), Visakhapatnam dt 16th Mar, 1982. It is contended before us that the amended sub-s. (9) of s. 171 of IT Act is only a machinery section and it does not empower the assessing officer to club the incomes of the separated coparc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave already come to the conclusion that the provisions of sub-section (9) of sec. 171 can be made applicable only to family assessments and it cannot be extended and made applicable to the firm s assessments, we are of the opinion that the order passed by the AAC on this point is in order." Sri. M.J. Swamy, ld. counsel for the assessee also brought to our notice another decision of the same bench dt. 17th July, 1983 for which both of us are parties disposing of I.T.A. No. 1309/Hyd/1982. There the question was whether the provisions of s. 171(9) can have any effect over the assessments of the firm which would be completed u/s 182 of the IT Act and also whether it infringes or makes in roads into the general Hindu Law. The ld. Departmental ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ultimate share of the heirs, through all its stages. To make the assumption at the initial stage for the limited purpose of ascertaining the share of the deceased and then to ignore it for calculating the quantum of the share of the heirs is truly to permit one s imagination to boggle." In short the submission made by the ld. Departmental representative was that the prohibition to recognise partial partition u/s 171(9) should be treated as prohibition for all purposes and not confined only to the assessments that are to be made against the HUF u/s 143 and 144. We fear that the ratio of the decision of the Hon ble Supreme Court may not really apply to the facts of this case. The fiction under Explanation 1 to s. 6 of the Hindu Success ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gether." Again at para 7 of our orders, we held as follows: "From the foregoing discussion we are clear in our minds that firstly the invalidity found in sec. 171(9)(a) does not extend to assessments of the firms which would be made u/s 182 of the IT Act. Secondly the invalidity does not invalidate partial partitions under general Hindu law. That means, despite the invalidity of the impugned partial partitions for purposes of assessments under sections 143 and 144 they are valid under general Hindu law and severance in status would be set in between the members of the family from the date of partial partition." Our attention is also drawn to the decision of the A.P. High Court in CIT vs. T. Veeraiah and K. Narasimhulu (1977) 106 ITR 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lves become creditors to the firm just like any other outsiders. Hence, the ratio of the Andhra Pradesh High Court s decision cannot apply to the facts of this case. In our above mentioned orders we have held at para No. 7 that s. 171(9) does not extend to the assessments of the firm which could be made u/s 182 of the IT Act. We also held that the said section does not invalidate partial partitions under general Hindu law. We specifically held that the provisions of s. 171(9) of IT Act would only invalidate partial partitions for purposes of assessments of HUF s u/s 143 and 144. Therefore, simply because in the assessments of the joint families of these two partners, these impugned amounts are includible in the income of the respective HUFs ..... X X X X Extracts X X X X X X X X Extracts X X X X
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