9911796707
TMI Blog1983 (9) TMI 121X X X X Extracts X X X X X X X X Extracts X X X X ..... rtenant thereto were acquired by the Government and Rs. 1,31,658 appeared to have been given for this portion by way of compensation by cheques to the various coparceners as per details given in the paper book in the form of extract from the cash book for 3-4-1975. 4. On these facts the assessee excluded from its return of income for the assessment year 1975-76 the value of the aforesaid property from its wealth. According to the assessee, the said property had ceased to be belonging to the HUF and as such it should not be assessed as the property belonging to the HUF. 5. The above contention of the assessee was not accepted by the WTO who pointed out that the assessee's claim for partial partition in the income-tax proceedings with regard to the said property had been rejected by the Tribunal vide its order in IT Appeal Nos. 1979, 1980 and 2569 (Cal.) of 1979 dated 5-9-1980 on the ground that the property in question had not been divided by metes and bounds and that for identical reasons the assessee's claim for partial partition had to be rejected in the wealth-tax assessment also. Accordingly, the WTO included the value of the property in the assessee's net wealth for the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s partial partition as to property, the family ceases to be undivided as regards properties in respect of which such partition has taken place but continues to be undivided with regard to the remaining family property. After such partial partition, the rights of inheritance and alienation differ according as the property in question belongs to the members in their divided or undivided capacity. Partition can be brought about (1) by a father during his lifetime between himself and his sons by dividing properties equally amongst them ; (2) by agreement ; or (3) by a suit or arbitration. A declaration of intention of a coparcener to become divided brings about severance of status . . . A physical division of the property which is the subject-matter of the partition is not necessary to complete the process of partition in so far as that item of property is concerned under Hindu law. The parties to the partition may enjoy the property in question as tenants-in-common . . . It is thus clear that Hindu law does not require that the property must in every case be partitioned by metes and bounds or physically into different portions to complete a partition. Disruption of status can be broug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year or years, including the year relevant to the previous year in which the partition has taken place, if the partition has taken place on the last day of the previous year and each member or group of members shall be liable jointly and severally for the tax assessed on the net wealth of the joint family as such. (2) Where the Wealth-tax Officer is not so satisfied, he may, by order, declare that such family shall be deemed for the purposes of this Act to continue to be a Hindu undivided family liable to be assessed as such." 11. A careful reading of the aforesaid section would show that it applies to the case of total partition where "the joint family property has been partitioned as a whole among the various members". In such a case an obligation has been cast on the assessee that he would bring it to the notice of the WTO that a partition has taken place among the members of the HUF and thereafter the responsibility has been cast upon the WTO to make inquiry into the aforesaid claim of the family members and to satisfy himself that the partition in question has taken place among the various members or group of members 'in definite portions', and after such satis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed. . . by the facts that in one year it has certain assets and certain income therefrom and that in the next year it is found to have parted with one asset and to be no longer in receipt of the same income. The same assessee has a different income in each year--that is all. It matters nothing whether the particular asset no longer possessed by the undivided family has become the separate property of a member or belongs to a stranger. . . ." At page 465, their Lordships again pointed out that Hindu undivided family "can part with an item of its property to its individual members if it takes the proper steps". The above observations apply, in our opinion, mutatis mutandis, to the case of partial partition under the Act. Section 20 does not refer to partial partition. The case of partial partition for the purpose of the Act has, therefore, to be dealt with under the terms of the Hindu law. The position under the 1961 Act, in this respect is, as noted earlier, radically different inasmuch as section 171 in terms refers to the case to partial partition also and prescribes the condition of division of an asset by metes and bounds even in the case of partial partition. This point has ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
