9911796707
TMI Blog1981 (2) TMI 97X X X X Extracts X X X X X X X X Extracts X X X X ..... of the HUF and was a partner representing his family in Haribhanjan Lal Someshwar Prasad, Sultanpur, up to the assessment year 1975-76. On 1-4-1976, a partial partition amongst the members of the HUF with regard to the investment of the family in the aforesaid firm was effected and the various members of the assessee's family, consisting of himself, his wife and his son were allotted the following shares in the original capital of the family in the said firm: Rs. Shri Keshav Shukla 35,898.97 Smt. Kalindi Shukla 35,898.97 Shri Anil Kumar Shukla 35,898.97 With the aforesaid capital the three p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the aforesaid firm should have been clubbed in his hands in terms of section 64 of the Act and that inasmuch as the ITO had completed the original assessment without making due enquiries with regard to the correct status of the assessee and with regard to the applicability of the provisions of section 64, his order was erroneous and prejudicial to the interest of the revenue. Accordingly he issued a show cause notice under section 263(1) of the Act to the assessee and asked him to explain as to why the assessment made by the ITO should not be set aside by him with the direction that fresh assessment should be made in accordance with law. 3.1 It was pleaded by the assessee before the learned Commissioner that the assessee's correct status ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held by the Hon'ble Allahabad High Court in the case of Purshottam Das Rais, that in the circumstances the status of the assessee in respect of the share income from the firm should have been taken as individual by the ITO and that in accordance with the provisions of section 64(1)(i), the share income of the wife from the same firm should have been included in the computation of the assessee's income for the assessment year 1976-77 and that inasmuch as the ITO had not carried out enquiries and made the assessment in terms of the above view of the law, his order was erroneous and prejudicial to the interest of the revenue and, therefore, the Commissioner set aside the order of the ITO and directed him to make the assessment de novo after gi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner to the family even after the aforementioned partial partition and as such the share in the divided property, which he received on partition of the family in his hands, continued to be belonging to the HUF consisting of himself, his wife and his unmarried daughters and as such the assessment made by the ITO on the assessee in the status of karta of the HUF was rightly made. 6. On behalf of the department, the order of the Commissioner was stoutly supported and it was stated that the facts of the case of Purshottam Das Rais clearly covered the facts of the present case and that, according to their Lordships of the Hon'ble Allahabad High Court, the correct view of law in the case of property received on partition was that in regard to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erty received by him on partition from his son and his wife not in his individual capacity, but as the karta of the family consisting of himself and his unmarried daughters. The correct position in law of the property received on partition by a member of the family been considered and pronounced by their Lordships of the Privy Counsel in Attorney General of Ceylon v. A.R. Arunachalam Chettiar [1958] 34 ITR 42. The above decision of the Privy Counsel has been approvingly quoted and relied upon by the Hon'ble Supreme Court while disposing of the appeal in the case of N.V. Narendranath v. CWT [1969] 74 ITR 190. At page 197, this is what their Lordships have stated with regard to the nature of property received on partition by a member of the H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts of the present case, it is seen that what was received by the assessee on partition was part of joint Hindu family property and that he had unmarried daughters who had the right of being maintained by the family. The property, therefore, which has been received by the assessee belongs to him as the head of the family consisting of himself and his daughters and to the existing family a son can always be added either by birth or by adoption and, therefore, the incidents of HUF property are not taken away merely because the assessee's wife and assessee's son have been separated after partition with regard to the share capital in the firm in which the assessee was formerly representing the entire family, consisting of himself, his son ..... X X X X Extracts X X X X X X X X Extracts X X X X
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