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TMI Blog1987 (11) TMI 126X X X X Extracts X X X X X X X X Extracts X X X X ..... eep. The whole of the property belonged to the HUF comprised of only movable property viz., debts due to and due from the HUF, the interest of HUF in various firms, the stocks, shares and debentures in various companies like Colgate Palmolive, Gwalior Rayons, Hindustan Motors, Bajaj Auto, Reliance Textiles Industries Ltd., etc., Life Insurance Policies. On 25-3-1982 a memorandum of partition was recorded whereby all the movable property held by the HUF was purported to have been divided into two equal halves between Srikrishnamohan Rao and his minor son Mallikarjuna Pradeep. The mother as a natural guardian represented the minor in the partition. It is stated in the memorandum of partition that except the movable property found in the capital balance in the accounts maintained by the HUF there was no other property to the HUF. It has been decided that the capital balance in the books of the assessee-HUF should be devided into two equal shares between Srikrishnamohan Rao and his minor son Mallikarjuna Pradeep. In fact, the capital balance was divided between the above two coparceners and after the said division there was no property belonged to the HUF which remained to be divided. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [1967] 63 ITR 522. The ITO held after eliciting the facts of the case of these two cases that each of them is different on facts with the present case, In the first of the cases shares were held by the members of the joint family individually even before partition and as such no necessity arose for transfer of shares. The said case was distinguished on the ground that in the present case the shares were held in toto by Srikrishnamohan Rao and none were held by Mallikarjuna Pradeep. So, it was held that the said decision does not apply. In the second of the cases according to the ITO had in fact laid down the principle that when an asset admits of physical division it should be divided and when an asset does not admit of physical division such as running business it would suffice if the interest is divided by appropriate entires in the books of account. In fact, according to him, the ratio deductible from the said decision is that division by book entires would be permissible only in the case of running business or in the case of partition of the interest of HUF in a firm. However, the asset which constitutes the capital should be business assets. However, in this case the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assets held by the HUF were immovable properties and they are properties which admit of a physical division. Further the Supreme Court was concerned itself with the legality of a partial partition in the case, whereas in the case before us all the assets held by the assessee-HUF are movable properties and the partition was a full-fledged partition and not a partial partition. Hence, according to Shri Ranganatha Chary, learned Advocate for the assessee, the decision in Kalloomal Tapeswari Prasad (HUF)'s case does not apply to the facts of the case before us. Secondly it is contended that even assuming the ratio of the Supreme Court in Kalloomal Tapeswari Prasad (HUF)'s case applies to the facts of the case the said ratio does not come in conflict or invalidates the manner of division made in this case. One of the modes of division recognised by the Hon'ble Supreme Court in the said case at page 708 is the following : "It is not necessary to divide each item into the number of shares to be allotted at a partition. If a large number of items of property are there they are usually partitioned on an equitable basis having regard to all relevant factors and if necessary by asking the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titled to refuse recognition for such a partition on the mere ground that it is unequal. In support of his contention the learned counsel for the assessee cited before us the Supreme Court decision in Apoorva Shantilal Shah v. CIT [1983] 141 ITR 558. The learned Departmental Representative contended that the lower authorities, as well as himself very much lay stress on the fact that the partition in this case was not effected, according to the terms of memorandum of partitions which states that the assets of the family were divided into two equal halves. So, on that basis the impugned order of the AAC is liable to be upheld. 6. After thus hearing both sides and after perusing the whole record he uphold the contention advanced on behalf of the assessee. In our view the memorandum of partition dt. 25-3-1982 is relied upon only as a record of past transaction. In our opinion this document by itself does not create any partition between the parties to the same. It only evidenced the partition already effected. Therefore, the question whether the partition was done according to the recitals of the document or not does not arise or does not assume any significance. We agree with the sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conflict of interest between the father and his sons. If the father does not act bona fide in the matter when he effects partition of joint family properties between himself and his minor sons whether wholly or partially, the sons on attaining majority can challenge the partition. In appropriate cases even during minority, the minor sons, though approved guardian, may impeach the validity of a partition brought about by the father either in entirety of the joint family properties or only in respect of a part thereof, if the partition had been effected by the father to the determinate of the minor sons and to the prejudice of their interests. It is open to the IT authorities to consider a partial partition to be invalid on the ground that share have not been equally divided and to refuse to recognise the same." The above ratio of the Hon'ble Supreme Court is unequivocal in its terms and does not require further elucidation or comments. It is self-explanatory in character. In view of the authoritative pronouncement of the Hon'ble Supreme Court the orders of the lower authorities are set side and we direct the ITO to accord recognition to the partition dated 25-3-1982. The appeal is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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