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TMI Blog1980 (4) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... claimed that there was a partial partition with reference to the sum of Rs. 50,000 available in the capital account of the family in the partnership and that the said sum of Rs. 50,000 was paid to Muthia on December 10, 1968. By an order dated October 18, 1969, the ITO accepted this claim of partial partition. During the assessment year 1971-72, a sum of Rs. 26,000 was paid in cash to Muthia and Rs. 82,100 was paid in cash to Thiagarajan on various dates. On the 2nd January, 1971, the family lands in the village were allotted to the two sons and their value of Rs. 4,14,1.10 was debited to the capital account of the family in the books of the HUF. The above payments were entered with narration as " paid " on account of " partial partition " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents were made " on account of partial partition ". The assessee filed a return disclosing a loss of Rs. 1,248 in its money-lending business and share income of Rs. 37,548 from M. K. Bankers firm for the assessment year 1971-72 and loss of Rs. 3,593 in its money-lending business and share income of Rs. 33,214 from the firm for the assessment year 1972-73. The assessee claimed on the basis of partial partition with reference to the amounts paid to the sons in these two assessment years, an order under s. 171. It may be mentioned that the two major sons, Muthia and Thiagarajan, also filed individual returns disclosing an income of Rs. 4,609 and Rs. 2,025, respectively, for the assessment year 1971-72 and Rs. 2,375 and Rs. 7,845, respectively, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AAC rejected this contention and confirmed the order of the ITO. The Tribunal, however, on further appeal, held that it was not correct to say that the entire cash must be construed as one item of asset, that any portion of such cash, even a rupee, could be made the subject of partial partition between the members of the family and that, on the facts and circumstances of this case, there was partial partition with respect to the cash paid to the two major sons as also in respect of the lands allotted to them. At the instance of the revenue, the following question has been referred : " Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the partial partition claimed by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tial partition on the ground that the partition did not cover the entirety of the asset, it cannot be held that there was no partial partition. In the case of cash belonging to the joint family, therefore, it is not necessary that the entire cash balance or the amount available to the credit of the family should be divided. But there should be a definiteness of the amount that is the subject-matter of a partial partition. Almost on similar facts, in the decision in Brij Mohan Lal Rameshwar Lal v. CIT [1971] 82 ITR 173 (All), these principles were accepted. In that case, the HUF consisting of one Rameshwarlal, his wife and his son had to its credit in the capital account of a partnership firm sum of Rs. 1,60,242. The family divided a sum of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capital owned by Rameshwar Lal's branch. Apparently, the family decided to take out this specific portion amounting to Rs. 60,000 for purposes of partial partition. Partial partition is expressly recognised by section 171 of the Act. If, in fact, there was partial partition and such partial partition is permissible in law, the Tribunal was bound to recognise it. " There could, therefore, be no doubt that even with respect to a portion of the cash available, there could be a partial partition. The learned counsel for the assessee contended that there is intrinsic evidence in the contemporaneous records prepared at the time of payment of moneys to the sons and the assessee had also taken a definite stand in its returns that in the assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accounts with specific amounts as allotted to them on partition, the novelty or peculiarity of such a procedure cannot, in any way, affect the legality of the partial partition itself. The learned counsel for the revenue may not be quite correct in contending that in the instant case there seems to have been a number of partial partitions. As already stated, the case of the assessee was though not specifically mentioned before the AAC or the Tribunal, that the total amount that was debited to the two major sons was the subject-matter of partial partition in each of the years. So far as the family lands in the village which were allotted to the two brothers, the contention of the learned counsel for the revenue was that it cannot be treat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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