9911796707
TMI Blog1986 (1) TMI 184X X X X Extracts X X X X X X X X Extracts X X X X ..... he income-tax assessment of the year recorded a fining of partial partition in relation to this jewellery. However, in the Wealth-tax assessment of the present assessee, he added back the market value of the gold and silver ornaments in the hands of the assessee after excluding the share of Shri Hukmichand. On appeal it was argued before the AAC that the value of the remaining gold and silver ornaments was assessable in the hands of the smaller HUF and not in the hands of the bigger HUF which was the assessee in the present case. The AAC accepted this contention stating that although partial partition had been derecognised after December, 1978, the present partition had been affected on 8th Nov., 1978 and therefore, was a valid partition in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rothers would belong to the smaller HUFs of which respective brothers would be the Kartas. This is the kind of partition known to Hindu Law. Initially in Join family of Udayan Chinubhai, etc. vs. CIT, Gujarat (1967) 63 ITR 416 (SC), one C had filed a suit for separate possession of his share against his wife and sons. The suit was decreed by consent and the ITO passed an order holding that the family should be deemed to have been partitioned and the assessments subsequent to the date could be made on two groups i.e., C and his five sons. Later the ITO sought to make assessment on the other parties, namely, his wife and son in the status of an HUF. The Suprem Court held that once an order of partition was recorded, it amounted to complete pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess continued to belong to the joint family of the mother and the minor son. source the mother had no right to demand a partition, it was not open to her capacity as a guardian to effect a partition between herself and a son. Therefore, the partition effected by the document of 11th Nov., 1961 was not effective in law and the smaller HUF consisting of the widow and the minor son continued to have 2/3rd interest whereas each of them, was individually entitled to 1/6th share in the remaining income from the business. Further in CWT vs. M.L. Ramchandra Setty and Sons (1979) 116 ITR 545 (Kar), it was held that it is open to the members of the HUF to agree to enter into a partial partition to hold the properties which were the subject matter of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been recognised IT the It laws, we are constrained to hold that the gold and diamonds in question had been partitioned and they therefore, ceased to belong to the present HUF. Consequently, in view of the Supreme Court decision in (1967) 63 ITR 416 (SC) and the Karnataka High Court decision in (1979) 116 ITR 545 (Kar) all the jewellery belonging to the bigger HUF should be deemed to have been partitioned between his various members and liability should be included in their net wealth as such. The WTO shall therefore, be at liberty to include the jewellery in the individual assessments of the other members of the family within the meaning of Explanation (2) to s. 17A(4) of the WT Act, 1957. Subject to this observation, the departmental ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtment, is not at all justified and therefore, the entire asset should be included in the hands of the bigger HUF. What we are concerned is about the factum of partial partition by the bigger HUF and its consequent effect on the bigger HUF for wealth tax purposes. Once the partial partition has been accepted, the logical consequence is exclusion of the property from the hands of the HUF for wealth tax purposes. The extraneous conditions such as some members of the HUF holding the property jointly and claiming it to be a small HUF are not all relevant for deciding the issue in the case of the present assessee. The claim made by such members has to be considered by the Department when the claim is so made. It would not be proper to consider a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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