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TMI Blog1987 (2) TMI 120X X X X Extracts X X X X X X X X Extracts X X X X ..... the family was partitioned among the deceased Sri K. Rajamanickyam Chetty and his five sons. The account copy, and the agreement executed on 31st March, 1961 was provided at page 3 of the paper compilation filed before us. At the time of the said partial partition except the eldest son Sri K.R. Shanmugam Setty the other four sons of the deceased were minors and they were all represented by their mother Smt K. Vaduvambal in the said partial partition. Each of the sons as well as the father got Rs. 13,714,58 towards his share. It is clearly stated in the agreement of partition that till that date they carried on joint family business and as there was difference of opinion crept up between the deceased and his eldest son they have decided to divide themselves and, therefore, divided the capital in the business including profit upto 31st March, 1961. The rice mill at Kattamanchi and the lands and house were agreed to be kept as joint properties. Again under the registered partition deed dt. 29th March, 1972 the deceased and his five sons partitioned the house and house site mentioned in the Schedule under that document. A true copy of the said document is furnished at page 5 of the pap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 605 (Mad) by observing that the SLP filed against the decision in (1980) 125 ITR 605 (Mad) was dismissed by the Supreme Court. A copy of the said order is furnished to us bearing EDA No. 12/81-82/TPT dt. 21st Aug., 1986 the name of the deceased being the late Bhaskara Laxminaryan Chetty. The ld. advocate for the accountable person also relied upon the A Bench decision of the Tribunal dt. 15th March, 1977 passed in EDA No. 52 (Hyd) 1975-76 wherein it was held following the law laid down in Mulla s Hindu Law, 14th Edition, para 328 that if there is evidence to show that the parties intended to severe the joint family status to put an end to and with regard to any portion of the property which remained undivided the presumption would be that the members of the family would hold it as tenants in common. Relying upon another treatise of HUF, Corparceners Income Tax Law, 2nd Edition, 1957 by B. Mallik and S.C. Manchanda at page 591 where from they have quoted the law it was found that when the properties are held as tenants in common the petitioner cannot be assessed in the status of an HUF. A copy of the said order of the A-Bench was furnished at page 9 to 13 of the paper compilatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alth-tax return was filed by the major HUF, represented by Sri K.P. Shanmugam for asst. yr. 1977-78 in which the agricultural lands were valued at Rs. 3,30,000 and the said value was returned as constituting the gross wealth of the assessee HUF. From that amount 1/6th share belonging to the deceased was deducted. The said wealth-tax amendment was furnished at page 7 of the paper compilation. However, the net taxable wealth was determined at Rs. 128,570. Therefore, having filed the Wealth-tax return for asst. yr. 1977-78 himself it estops the accountable person to contend that no HUF existed on the date of the death of the deceased. Next, it is contended that on the legal front the Andhra Pradesh High Court decisions took a different stand than that of the Madras High Court in Devaki Ammal s case. He had pointed out that the decisions mentioned in the impugned order by the Appellate Controller of Estate Duty in this regard are the following: N. Krishnaprasad vs. ACED (1972) 86 ITR 332 (AP). In that case it was held by the A.P. High Court that s. 34(1)(c) of the ED Act does not make an inroad into the property of the lineal descendant but only takes it into consideration for the purp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the appellant s case. It is further contended by the ld. departmental representative that the very fact that the deceased and his sons chose to keep agricultural lands as joint property would clearly reveal the intention that they wanted to continue the joint family as far as agricultural lands are concerned and, therefore, there is strange circumstantial evidence to contribute to the theory of continuance of HUF rather than its disruption. 5. Thus, we have heard the arguments advanced on both sides and perused several documents on record as well as the impugned orders on the subject. Having regard to the material before us we are inclined to accept the submissions made by Sri M.J. Swamy, ld. advocate for the accountable person. As far as the legal aspect is concerned we are unable to accept the submissions of Sri M.J. Swamy and we are unable to follow the Madras High Court decision reported in (1973) 91 ITR 94 (Mad) later followed by 125 ITR 605 by the same High Court ignoring the three binding decisions of A.P. High Court stated supra. We uphold the contentions of the ld. Departmental Representative when he argued that simply because a SLP filed before the Supreme Court was d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... family property. If it is a joint property the co-shares may be tenants-in-common or joint tenants. If it is joint family property then we can take it that no severance in status has set in and the coparceners wanted to divide only the movable properties and wanted to keep the joint family intact as far as immovable properties are concerned for the partial partition may be with regard to either properties or persons. Whether after a partial partition took place in the joint family, the family continued to be joint with regard to other properties or not is a question of fact to be decided on several factors. Firstly, partial partition dt. 31st March, 1961 spelt out the decision of the family members to divide themselves and the recital is as follows: "Agreement between K. Rajamanikyam Setty and his son K.R. Shanmugam Setty of Chittoor on the 31st March, 1961 is to the effect that both of us carrying on business jointly until now and since there are differences of opinion between us we have today decided to divide ourselves and as on today divided the capital in the business including the profits upto 31st March, 1961." So it is clear that the members of the joint family did not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bout a clear severance in status if the first partial partition dt. 31st March, 1961 was not having that effect. The 'A' Bench of the Tribunal in EDA No. 52(Hyd) 1975-76 in a similar case held that there was no possibility of aggregating the lineal descendants share. In the last para of their order the ld. Members purporting to follow the decision in the case of P. Cheradappa Pai vs. Agrl. ITO, Puthur (1970) 77 ITR 313 (Mys) held that when the properties are held as tenants-in-common the petitioner cannot be assessed in the status of an HUF. We respectfully follow the earlier order of 'A' Bench and hold having regard to the facts and circumstances of this case severance in status had set long back on 31st March, 1961 or in the alternative on 29th March, 1972 and simply because agricultural lands were held jointly it does not amount to joint family continuing till the date of the death of the deceased. We, therefore, allow the appeal on this ground. 6. Regarding the second ground the agricultural lands were valued at Rs. 3,33,000 by the WTO in asst. yr. 1977-78. But when we come to estate duty proceedings the value of the agricultural lands was agreed to be valued at Rs. 3,96,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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