9911796707
TMI Blog1996 (1) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... d its members and sustaining the inclusion of the jewellery of the value of Rs. 89,892 for the assessment year 1975-76 and Rs. 94,000 for the assessment year 1977-78 in the net wealth of the assessee ? " The brief facts of the case are that the assessee is a Hindu undivided family consisting of the coparceners Sarvashri Lalchand - karta of the Hindu undivided family and his two sons, Jawahar Lal and Lalit Kumar. On Kartik Wadi 3, Samvat year 2031, a partial partition of the asset relating to jewellery held by the Hindu undivided family was effected and 1/3rd share, out of the jewellery, was given to Mr. Lalit Kumar. The Hindu undivided family, in the return of the net wealth filed for the assessment years 1975-76 and 1977-78, did not incl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation, for the opinion of the High Court. The Tribunal referred the question mentioned in paragraph No. 1 above and refused to refer the other questions for the opinion of this court. It is contended by learned counsel for the assessee that there can be a partial partition with respect to the property belonging to the Hindu undivided family or between the persons constituting the Hindu undivided family in view of the provisions of section 20 of the Wealth-tax Act. He further submitted that the Hindu law also permits such partial partition and, therefore, the Tribunal as well as the wealth-tax authorities committed an error in not recognising the partial partition and assessing the bigger Hindu undivided family with respect to this jewelle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on has taken place among the members of a Hindu undivided family, and the Assessing Officer, after inquiry, is satisfied that the joint family property has been partitioned as a whole among the various members or groups of members in definite portions, he shall record an order to that effect and shall make assessment on the net wealth of the undivided family as such for the assessment year or years, including the year relevant to the previous year in which the partition has taken place, if the partition has taken place on the last day of the previous year and each member or group of members shall be liable jointly and severally for the tax assessed on the net wealth of the joint family as such. (2) Where the Assessing Officer is not so sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Income-tax Act. The language used in section 20 of the Wealth-tax Act and the scheme of the Act, therefore, clearly show that unless there is a severance of the status of jointness, the provisions of section 20 of the Wealth-tax Act are not attracted. Section 20 does not contemplate any partial partition and is alien to the Wealth-tax Act. Section 20 of the Act does not recognise any partial partition and no partial partition can, therefore, be recorded. After the incorporation of section 20A of the Act, partial partition can neither be claimed nor can it be recorded or recognised under the Wealth-tax Act and the family continues to be assessed as if no such partial partition has taken place. Now, we take up the judgments on which relia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1961, includes a ' partial partition ' also either as regards the persons constituting the undivided family or the properties belonging to it or both, in view of the provisions contained in the other sub-sections and in the Explanation. After a partial partition as regards the property, the property divided is held by the members of the undivided family as divided members with all the incidents flowing therefrom, and the property not so divided, as members of an undivided family. In CIT v. Gopi Chand B. Tholia [1980] 125 ITR 611 (Raj), it has been held that " the partial partition can be recognised under section 171 of the Income-tax Act, 1961 ". In CIT v. Vajulal Chunilal (HUF) [1979] 120 ITR 21, the Division Bench of the Gujarat Hig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the members of the Hindu undivided family in so far as the three estates are concerned, can be recognised under section 20 of the Act ? The Division Bench of the Karnataka High Court held that " section 20 of the Wealth-tax Act, 1957, dealing with the partition in Hindu undivided family applies to a case where ' the joint family property has been partitioned as a whole among the various members or groups of members in definite portions '. The expression ' partition as a whole ' means that a partition has taken place in its entirety in respect of all the property of the family. Section 20 cannot, therefore, be applied to a case of partial partition of the family's assets." The net result of the above discussions, therefore, is that secti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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