9911796707
TMI Blog1979 (7) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Shyam Sunder, his wife, Gayatri Devi, and four minor sons, one of them being Daya Shanker, constituted a HUF. This family carried on business in iron and steel and was being assessed in the status of a HUF. In the year 1969-70, a claim was made before the ITO that a partial partition of the business had taken place between Shyam Sunder and three minor sons and Smt. Gayatri Devi and Daya Shanker with the result that the capital of the HUF firm was divided in accordance with the agreement dated 30th September, 1968.The ITO on the view that the deed did not set out the share of the other coparceners and was only between Shri Shyam Sunder and his wife, declined to accept the partition. On an appeal being filed, the appellate authority t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ares with himself. Even if unequal shares are allotted, the partition still holds good in case it is acquiesced by the sons or not repudiated by the minor sons on attaining majority. A partition may be partial as to the property and also as to the persons separating. In a case, where it is a partial partition as to the property the members of the HUF continue as a joint family as respects the undivided properties. We have alluded to these general propositions for they will become handy for deciding the dispute that has arisen. Before coming to grasp with the controversy it is necessary to state a further proposition which is equally well established. No particular method is required to effect a partition, and all that is necessary is that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the extent of their respective shares in the capital of the joint HUF credited in the books of that firm. The fourth clause of the preamble and the first and the second clauses of the deed throw doubt as to whether the deed is a partial partition only as respects the family business or it has effected a partition of persons constituting it. This is so, because the fourth clause speaks of Sri Shyam Sunder Saraf along with Vijay Kumar Saraf, Ajai Kumar Saraf and Sanjai Kumar Saraf as constituting the HUF, and leaves out Smt. Gayatri Devi and Sri Daya Shanker Saraf. Thus, it excludes Smt. Gayatri Devi and Sri Daya Shanker Saraf from the membership of this HUF. Of similar effect are clauses first and second of the deed of agreement, which re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess the contrary is proved is exemplified by the decisions in the cases of Mst. Rukmabai v. Laxminarayan, AIR 1960 SC 335, Mudigowda Gowdappa Sankh v. Ramchandra Revgowda Sankh, AIR 1969 SC 1076, and Hirachand Vastaram v. CIT [1965] 58 ITR 533 (Cal). In the case of Shree Meenakshi Mills Ltd. v. CIT [1963] 49 ITR 156 (sic) it was held that a mere deed of partition is not sufficient to establish that the partition has factually taken place in case there are circumstances which indicate to the contrary. One of the circumstances which tilted the balance in that case was that the father, after effecting the partition had continued to manage the property as before. Similar was the position in the case of ITO v. Bachu Lal Kapoor [1966] 60 ITR 74 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h was being run as that of the HUF is converted into a partnership business by inducting Smt. Gayatri Devi as a partner. No restriction on the right of Smt. Gayatri Devi to participate in the management of the business is imposed by this agreement. In fact, cl. 7 of the deed recites that the rights and the liabilities of the partners will be in accordance with the provisions of the Indian Partnership Act. Under the Indian Partnership Act, each partner has a right to look after the business of the firm, and acts as its agent. Thus, looking at this deed, the nature of the management of the erstwhile business has changed, as also its character from a HUF business to a partnership business in which both Sri Shyam Sunder Saraf and Smt. Gayatri D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be genuine only in cases of rich families and not those which had limited means. The Hindu law, however, treats rich and indigent families alike. The other circumstance relied upon is that Sri Daya Shanker Saraf and Smt. Gayatri Devi Saraf continued to remain with the other members of the family, and were messing together. It has been consistently held that living and messing jointly or separately are not conclusive of the fact that the family is either joint or partitioned : See Hari Raj Swarup v. State of U.P. [1970] 77 ITR 853 (All). The Tribunal erred in the circumstances of this case in holding that the family had not been partitioned. So far as registration is concerned, that has been refused solely on the ground that no partition had ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
