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TMI Blog1967 (12) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... f Kishori Lal Sunder Lal. This was down to March 31, 1955. There was partial partition in the Hindu undivided family, in consequence of which the business of the Hindu undivided family firm, Kishori Lal Sunder Lal, was taken over by a partnership consisting of the father and the three sons, which was a partnership coming into existence from April 1, 1955. Subsequently, on June 9, 1955, Kishori Lal and his three sons executed a partnership deed, annexure "F", in which they said that they had partitioned the Hindu undivided family business so as to carry it in their individual family rights and liabilities as a separate partnership concern, that the entire capital investment in the business known as Kishori Lal Sunder Lal was divided among th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s on April 1, 1955, amounting to Rs. 29,916-2-6 and that although the partnership consisting of the father and the sons claimed to have taken over that family timber business, they did not take over that liability of Rs. 29,916-2-6, which, on the contrary, was left to be paid by the Hindu undivided family of Kishori Lal and his three sons. On appeal the Income-tax Appellate Tribunal in its order of October 28, 1964, reversed that order and came to the conclusion that the timber business owned by the Hindu undivided family of Kishori Lal and his sons came to an end on 31st March, 1955, and that business was taken over by the partnership of Kishori Lal and his three sons under the name and style of Kishori Lal Sunder Lal on and from April 1, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pinion that the members of the Hindu undivided family could very well leave the liabilities of the business of that family in the amount as stated already to be paid by the Hindu undivided family while taking over the timber business without such liabilities by the partnership firm. So, considering the above material, it found as a fact that on and from April 1, 1955, the Hindu undivided family timber business was taken over by firm Kishori Lal Sunder Lal, a registered partnership, and on that finding it decided as explained above. On an application by the Commissioner of Income-tax, Punjab, Jammu and Kashmir and Himachal Pradesh, under sub-section (1) of section 66 of the Act, the Tribunal has made reference of these questions to this cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was merely a shadow transaction arrived at to escape liability for income-tax. He refers to G. Venkataswami Naidu & Co. v. Commissioner of Income-tax to contend that after the Tribunal found primary evidentiary facts, then, in the present case, it had to apply legal principles in regard to partial partition to reach the conclusion whether the timber business continued to be the business of the Hindu undivided family of Kishori Lal or it became the business of the partnership firm. The subject of partial partition is dealt with in paragraph 328, at page 381, of Mulla's Hindu Law, 1966 edition, and for the present purpose the manner and method of such partial partition is the same as that of partition, which subject is dealt with in paragraph ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat has been decided by the Tribunal is then a mixed question of fact and law. This argument ignores the clear statement in the paragraphs already referred to that it is the intention of a coparcener which determines whether he has had partial partition or not. Intention is always a question of fact. So that when those principles of Hindu law in relation to partial partition are applied to the primary evidentiary facts found by the Tribunal, the conclusion reached in regard to the intention of the coparceners of Kishori Lal's Hindu undivided family still remains a conclusion of fact, being a conclusion on their intention in this respect. In Sir Sundar Singh Majithia v. Commissioner of Income-tax , their Lordships of the Privy Council, in re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the shape or form of the question is not material. The question itself proceeds on the basis that in a case of the type as the present where there is no division of liabilities, there is no case of valid partial partition of the Hindu undivided family business, but the omission to divide the liabilities is only one factor for consideration. It is not the sole deciding factor. The Tribunal has considered at least seven other factors on which it has based its finding of fact. It has also considered that eighth factor, but has come to the conclusion that non-division of liabilities did not affect the question of effective partial partition of the joint family business by Kishori Lal and his three sons. Merely because the Tribunal has, after du ..... X X X X Extracts X X X X X X X X Extracts X X X X
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