9911796707
TMI Blog1982 (7) TMI 203X X X X Extracts X X X X X X X X Extracts X X X X ..... the members of the said joint family had severed in status. But, the house property not being capable of physical division by metes and bounds, it was agreed to be enjoyed in common by sharing the income equally. When this partition was placed before the ITO, an order under section 171 of the Income-tax Act 1961 ('the Act'), was passed by him on 3-3-1976 by which only the partition with regard to movable property were accepted and the order was silent with regard to the immovable property. Since the order stated that only a partial partition has been recognised, the HUF continued to exist in respect of the immovable property. It may be mentioned that the Appellate Tribunal by its order dated 19-8-1981 in [IT Appeal Nos. 455 and 456 of 1980] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions which could attract the independent provisions of the Gift-tax Act. 4. On consideration of the rival submissions, we are of the opinion that the assessee is entitled to succeed. No doubt, the document dated 1-4-1972 recorded a complete partition between the three coparceners of the joint family and specifically provided that the house property with which we are concerned would be thereafter held by them as tenants-in-common. This partition of that asset has not been accepted by the ITO in order under section 171. Therefore, for the purposes of the Act to the extent that the partition was not recognised the HUF shall be deemed to continue to be a HUF for the purpose of the Act. One of the coparceners has released his right in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re is a partition. But even if there is a partition and the coparcener transfers is share, on the one hand for the purpose of the Act, such a transfer will not be recognised if the partition is not accepted under section 171 and the income from that property will have to be added to the income of the HUF which is deemed to continue to exist, whereas for the purpose of the Gift-tax Act, the transfer will have to be accepted on the ground that the coparcener had transferred his separate interest without consideration. There is, thus, a clear conflict between the two situations which may not occur in respect of the other related enactment, such as the Wealth-tax Act where there is a provision for making an order similar to section 171, i.e., u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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