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TMI Blog2004 (8) TMI 94X X X X Extracts X X X X X X X X Extracts X X X X ..... with effect from April 1, 1980, it would not make any difference as the language of section 20A is very clear and unambiguous and has to be given full effect. The interpretation placed by the Tribunal on the memorandum, while introducing the Bill in Parliament on the aforesaid section is misplaced. – Question is answered in negative, i.e., in favour of the Revenue - - - - - Dated:- 13-8-2004 - Judge(s) : R. K. AGARWAL., K. N. OJHA. JUDGMENT The Income-tax Appellate Tribunal, Delhi, has referred the following question of law under section 27(1) of the Wealth-tax Act, 1957, hereinafter referred to as "the Act", for the opinion of this court: "Whether, on the facts and in the circumstances of the case, the Tribunal was legally corr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alf of the assessee. Learned counsel for the Revenue submitted that on a plain reading of section 20A of the Act, which was inserted by the Finance (No. 2) Act, 1980, with effect from April 1, 1980, a partial partition which has taken place after December 31, 1978, has not been recognised and the Hindu undivided family would continue to be assessed under the Act as no such partial partition had taken place. According to him, as partial partition in the present case had taken place on January 25, 1979, with effect from January 1, 1979, the same has to be ignored altogether. He further submitted that the Explanation to section 20A of the Act adopted the same meaning to the partial partition as has been given in clause (b) of the Explanation t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection (9) was also inserted in section 171 of the Income-tax Act by the same Finance (No. 2) Act. It reads as follows: "(9) Notwithstanding anything contained in the foregoing provisions of this section, where a partial partition has taken place after the 31st day of December, 1978, among the members of a Hindu undivided family hitherto assessed as undivided,- (a) no claim that such partial partition has taken place shall be inquired into under sub-section (2) and no finding shall be recorded under sub-section (3) that such partial partition had taken place and any finding recorded under sub-section (3) to that effect whether before or after the 18th day of June, 1980, being the date of introduction of the Finance (No. 2) Bill, 1980, s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he partial partition which has taken place after December 31, 1978, has not been recognise in the Income-tax Act or under the Wealth-tax Act and the Hindu undivided family would be continued to be assessed as such, notwithstanding the claim of partial partition effected by them. It may be mentioned here that prior to the Income-tax Act, 1961, the Indian Income-tax Act, 1922, did not recognise partial partition. Even under the 1961 Act all partial partitions have not been recognised. Only such partial partitions, which were in accordance with the Explanation to section 171, had been recognised. After considering various decisions, the apex court in the case of Kalloomal Tapeswari Prasad (HUF) v. CIT [1982] 133 ITR 690, has held that the subs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ght about by any of the modes referred to above and it is open to the parties to enjoy their share of property as tenants-in-common in any manner known to law according to their desire. But the income-tax law introduces certain conditions of its own to give effect to the partition under section 171 of the Act." The court also held: "If a transaction does not satisfy the above additional conditions, it cannot be treated as a partition under the Act even though under the Hindu law there has been a partition-total or partial. The consequence will be that the undivided family will be continued to be assessed as such by reason of sub-section (1) of section 171." The decision of the apex court in the case of Kalloomal [1982] 133 ITR 690 wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [1999] 238 ITR 1027. The apex court has, however, held that: "it is clear that for the purposes of income-tax, the concept of partial partition of the Hindu undivided family was recognised, but is done away with by the amendment which specifically provides that where a partial partition has taken place after December 31, 1978, no claim of such partial partition having taken place shall be inquired into under sub-section (2) and no finding shall be recorded under sub-section (3) that such partial partition has taken place. If any such finding is recorded under sub-section (3) whether before or after June 18, 1980, being the date of introduction of the Finance (No. 2) Bill, 1980, the same shall be null and void. The effect of the aforesaid s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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