9911796707
TMI Blog1986 (8) TMI 87X X X X Extracts X X X X X X X X Extracts X X X X ..... , (3) Shri Pravin Mayabhai, (4) Shri Girish Mayabhai. (b) The assessee, through its karta is a partner in the firms of Mayabhai Associates and Vimal Corporation, having 15 per cent share in each of the firms. (c) By two separate identical declarations both dated 28-3-1979 executed by Vipin Mayabhai and Pravin Mayabhai, the former relinquished his right, title, claim or interest in the assessee's share in the firm of Mayabhai Associates as well as the amounts standing in the capital accounts of the assessee. Similarly, the latter relinquished his right, title, claim or interest in the assessee's share in the firm of Vimal Corporation as well as the amounts standing in the capital account of the assessee. 4. On the aforesaid facts, the assessee took up a stand before the ITO that when two coparceners executed the declarations on 28-3-1979, two new HUFs, called by them as Mayabhai Laxmichand HUF No. 2 and Mayabhai Laxmichand HUF No. 3, came into being. HUF No. 2 consisted of three coparceners, viz., Shri Mayabhai Laxmichand, Shri Pravin Mayabhai and Shri Girish Mayabhai, while HUF No. 3 also consisted of three coparceners, viz., Shri Mayabhai Laxmichand, Shri Vipin Mayabhai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Mayabhai Associates and of Rs. 23,728 in the firm of Vimal Corporation, in the total income of the assessee. In this way, the ITO computed the total income of the assessee at Rs. 61,782 as against Rs. 10,340 declared by the assessee in its return of income filed on 30-6-1980. 6. Being aggrieved by the order of the ITO, the assessee went up in appeal before the AAC and reiterated the submissions which were made before the ITO. At the stage of AAC, the assessee also relied on two decisions of the Hon'ble Gujarat High Court in the cases of CED v. Babubhai T. Panchal [1982] 133 ITR 455 and CIT v. Shantikumar Jagabhai [1976] 105 ITR 795. The AAC's attention was also drawn to the fact that HUF Nos. 2 and 3 were assessed in respect of 15 per cent share in the firms of Mayabhai Associates and Vimal Corporation respectively by the ITO in the assessments framed under section 143(3) of the Act on 5-3-1983 and 4-2-1983 respectively, which were framed prior to the assessment framed in the hands of the assessee on 23-3-1983. It was, therefore, urged that the said income cannot be taxed twice once in the hands of the said HUF Nos. 2 and 3 and again in the hands of the assessee. The AAC, in hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot get any support from the said decision. In this connection, he also highlighted the fact that in the said case, the Hon'ble High Court was called upon to give their opinion in respect of section 2(15) Explanation 2, and sections 5, 9, 27 of the Estate Duty Act, 1953. 7.1 Inviting our attention to the declaration, more particularly, the following: "3. That I had on 28th day of March, 1979, relinquished all my rights, title, claim or interest from the said property of the HUF, viz., the partnership share and the credit balance of the capital account in the partnership firm of Mayabhai Associates in favour of the remaining members of the said HUF of Shri Mayabhai Laxmichand who have decided to continue to own, possess and hold the said property, viz., 15 p. share in the profit and loss of the said partnership firm of Mayabhai Associates and credit balance of Rs. 52,000 of the capital account in the said partnership firm as the HUF known as the HUF No. 2 of Shri Mayabhai Laxmichand. 4. That from the said date, i.e., 28th day of March, 1979, I myself or my legal heirs, successors, executors or assignees have no right, title, claim or interest in the said property of the HUF of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essed in respect of these properties though the father had released his interest from the said properties. Held The assessee's contention was correct as the department had recognised the separate existence of the four brothers and the properties from which the father released his interest thereafter belonged to the same joint family of four brothers and was, therefore, assessable in their hands." According to the learned counsel for the assessee in view of the aforesaid decision, there can be multiple HUFs as is claimed in the present case. 8. The learned representative for the department, in his reply, submitted that since in the aforesaid unreported decision a partial partition had been recognized under section 171, by the AAC against the order of the ITO rejecting the same, there were in fact two HUFS, one consisting of the father, mother and four sons and the other consisting of four sons. However, in the instant case, as recognition of partial partition has been debarred in respect of any such partial partition which took place after 31-12-1978, see section 171(9), the assessee could not have approached the ITO to pass an order under section 171, recognising the partial ..... X X X X Extracts X X X X X X X X Extracts X X X X
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