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TMI Blog1978 (8) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... r being a minor, was represented by his father) that they would hold three estates with effect from that date as tenants-in-common in equal shares and they would cease to be properties of the joint family. The family continued to be undivided for other purposes. On March 31, 1970, there was a record made in the books of the HUF that in regard to the said estates there had been a partition and the corresponding capital had been divided amongst the members. On March 30, 1973, a formal partition deed was drawn up and registered. After the declaration made on March 17, 1968, Shashikumar, one of the sons of M. L. Ramachandra Setty, died leaving his wife, Kasturi Bai, and his children. During the assessment years 1970-71, 1971-72 and 1972-73 M. L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the estates in question in the wealth of the HUF in the assessment orders relating to the three years in question. M. L. Ramachandra Setty filed appeals before the Tribunal against the orders passed by the AAC. The HUF filed appeals before the Tribunal against the orders passed under s. 25(2) of the Act by the Commissioner. The Tribunal held that the estates in question were held by the assessees as tenants-in-common and they did not belong to the HUF on any of the three valuation dates in question by virtue of the agreement dated March 17, 1968, which brought about a partial partition. Hence, their value could not be included in the wealth of the HUF, but one-seventh of their value should be included in the wealth of each of the seven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in holding that the assessee owned 1/7th share in the three estates on the valuation date ? (2) If the answer to question No. (1) is in the affirmative, then whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the assessee is entitled to a deduction of Rs. 1,50,000 under s. 5(1)(iva) of the W.T. Act, 1957, in respect of the assets held by the HUF in which the assessee is a co-owner ?" It is appropriate to take up for consideration the questions referred to us in relation to the HUF first. The contention of the department is that in the absence of an order made under s. 20 of the Act the properties belonging to the HUF should continue to be treated as the properties of the HUF notwit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cases of partial partition as it has been done under s. 171 of the I.T. Act, 1961. In a case which arose under the Indian I.T. Act, 1922, in Sir Sundar Singh Majithia v. CIT [1942] 10 ITR 457, the judicial Committee of the Privy Council, while construing s. 25A of that Act, held that s. 25A did not prohibit members of a HUF from entering into a partnership in respect of a portion of the joint property if they had partitioned amongst themselves and that that section had no reference at all to a case of HUF which had parted with an item of property to its individual member taking proper steps and continued in existence at the time of assessment, never having been disrupted. Where some of the members of the HUF had agreed to hold a property w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agree to enter into a partial partition and to hold the properties which were the subject-matter of such partial partition, as tenants-in-common, while continuing to be joint in respect of other properties of the family. The Tribunal was, therefore, right in holding that s. 20 of the Act did not apply to cases of partial partition as to property, that the properties in question did not belong to the HUF on the valuation dates and further that it was not necessary to divide the estates by metes and bounds. The three questions referred to us in T.R.C. Nos. 158 to 160 of 1977 are answered in the affirmative and in favour of the assessee-HUF. In view of the above answers, the first question which is common to T.R.C. Nos. 155 to 157 of 1977 is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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