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TMI Blog1984 (5) TMI 105X X X X Extracts X X X X X X X X Extracts X X X X ..... 1975-76 onwards, had excluded the entire value of jewellery so partially partitioned. The WTO, however, only excluded that portion of jewellery which was taken away by Shri Lalit Kaman but included the balance of jewellery so partially partitioned in the hands of appellant HUF. The WTO had apparently included the same in the appellant HUF's hands on the ground that the remaining jewellery continued to belong to the appellant HUF though one of he coparceners would not be entitled to any share in the undivided jewellery. The AAC in his order observes that partial partition of a part of jewellery was effected during the asst. yr. 1975-76, according to which a portion of the jewellery was given to Shri Lalit Kaman and the other members of the HUF had retained that portion of the jewellery so partitioned jointly. The assessee since from year 1976-76 had excluded from its wealth the jewellery so partitioned by the HUF. The assessee had been appealing against the inclusion of that portion of the jewellery which was retained jointly by the other members of the HUF excluding Lalit Kaman as the assessee HUF's wealth. The AAC further observes in his order "It would not be out of place to poin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... away by Shri Lalit Kaman from the wealth of the assessee HUF. He added that the WTO's action is so illogical that he excludes a portion of the jewellery so partitioned among the members but includes that portion of the jewellery which has been so partitioned but retained by some of the members in their joint capacity as the wealth of the HUF. He further argues that either the WTO should have entirely excluded the jewellery so partially partitioned or included the entire jewellery derecognising the partition. The facts of the case are very clear as Shri Ranka says that partition has been found to be a fact. The duty of the WTO is to assess the wealth of the HUF as on valuation date and as on the valuation date relevant from asst. yr. 1975-76. The jewellery so partially partitioned cannot be under any circumstances included as the wealth of the HUF because it did not remain as the HUF's property from the date of partial partition. Shri. Ranka further pointed out that the AAC accepted this fact and from the reading of his order it could only be seen that what he intends to include only that portion of jewellery which was not partitioned as the wealth of the HUF. Shri Ranka further sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given a part of it in connection with his marriage or the remaining properties would belong to the remaining members as a smaller HUF. The claim of the assessee is that the remaining jewellery belongs to smaller HUF and not the bigger HUF. It is, therefore evident that there has been no partial partition of jewellery and some jewellery given to Shri Lalchand was not by way of partition, as the remaining jewellery according to the assessee itself was never partitioned. There cannot be partial partition particularly with reference to an asset and a coparcencer. In this view of the matter we are of the opinion that the jewellery in question has rightly been included by the WTO in the net wealth of the assessee HUF. In the circumstances, we reverse the orders of the AAC and restore that of the ITO." We are of the view that the short question for consideration in the instant case is whether after a partition of certain properties of HUF could be included in the hands of the HUF or not. The fact as observed by the WTO as well as by the AAC which is not disputed at all is that a partial partition was effected during the previous year relevant to the asst. yr. 1975-76. As a consequenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R 304 (All) where their Lordships were faceted with a question whether on the facts and in the circumstances of the case the sum of Rs. 3 lacs was rightly included in the total wealth of the assessee HUF for asst. yr. 1959-60. In this particular case a partial partition was effected in respect of Rs. 3 lacs of the HUF properties and the same sum was invested by the members. The WTO had recognised the partition as effected and even the AAC accepted this fact. The only objection of the Department was that this partial partition was effected on the valuation date. The High Court observed as under: "As it seems not to be in doubt that any asset acquired by the valuation date is to be included in the assets for calculating the net wealth, it means that if an asset for calculating the net wealth, it means that if an asset changes hands twice or thrice or the valuation date, its value will be included in the net wealth of two or three assessee. This would be anomalous, the same asset being taken into account in the computation of the net wealth of two or three assessee. This anomaly can be avoided only by holding that the net wealth at the last moment off the valuation date is to be ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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