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TMI Blog2008 (3) TMI 281X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Shambhu Chopra Respondent's Counsel - Shashi Kant Gupta and R.V. Gupta JUDGMENT The judgment of the court was delivered by Sudhir Agarwal, J. - In ITRs No. 23 of 1982 and 47 of 1987, the following two questions of law have been referred to be answered by this Court : "1. Whether on the facts and in the circumstances of the case the Income-tax Appellate Tribunal was correct in law in holding that the business income pertaining to the sales and manufacture of rice and other grain etc. was assessable in the hands of the bigger HUF and not in the hands of the smaller HUF? 2. Whether on the facts and in the circumstances of the case Income-tax Appellate Tribunal was correct in law in holding that the business of sale and ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on by Sri Harjeet Singh in the state of HUF. For the years 1966-67 to 1968-69, the assessments were made in the status of HUF and the assessee was assessed both in respect of income tax from business and the property income. The assessment for the year 1969-70 was also made in the status of HUF. The assessee claimed that there was another partial partition in the family on 21.10.1968 when capital of Rs. 1,93,402/- was divided between Harjeet Singh (Karta) and his two wives Smt. Suraj Kumar and Smt. Dharmendra Kaur and three minor sons Harmendra Singh, Ravindra Singh and Pratap Singh. The Commissioner (Appeal) held that the correct status of the assessee was that of HUF. Thereafter, for 1971-72 and 1972-73, the business income of assessee w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he time of making an assessment under section 143 or section 144, it is claimed by or on behalf of any member of a Hindu family assessed as undivided that a partition, whether total or partial has taken place among the members of such family, the Assessing Officer shall make an inquiry thereinto after giving notice of the inquiry to all the members of the family. (3) On the completion of the inquiry, the Assessing Officer shall record a finding as to whether there has been a total or partial partition of the joint family property, and, if there has been such a partition, the date on which it has taken place. (4) Where a finding of total or partial partition has been recorded by the Assessing Officer under this section, and the partition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, whether total or partial. (8) The provisions of this section shall, so far as may be, apply in relation to the levy and collection of any penalty, interest, fine or other sum in respect of any period up to date of the partition, whether total or partial, of a Hindu undivided family as they apply in relation to the levy and collection of tax in respect of any such period. (9) Notwithstanding anything contained in the foregoing provisions of this section, whether 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 shal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wever, where transfer of property is sought to be claimed from one person to another, namely, in the present case, from smaller HUF to bigger HUF, in order to give effect to partition whether partial or complete, there has to be an enquiry made by the ITO and acceptance about such partition by him. In the absence thereof, even if such transfer has taken place, it would not give any benefit for the purpose of Income Tax Act and the property would be assessed in the hands of such assessee where it was being assessed before the alleged partition. In Kalloomal Tapeswari Prasad (HUF) Vs. C.I.T. 1982 (133) ITR 690, the Apex Court held that a claim made that a partition, total or partial, has taken place, but disallowed by the Income Tax Off ..... X X X X Extracts X X X X X X X X Extracts X X X X
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