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TMI Blog1983 (12) TMI 101X X X X Extracts X X X X X X X X Extracts X X X X ..... which was accepted by the ITO vide his order under section 25A of the Indian Income-tax Act, 1922, dated 21-7-1962, which forms Annexure V to the order of the ITO which is impugned. After the said partition, Nathu Mal continued to be assessed as HUF with lower limit consisting of his minor son and wife and he continued to run the business under the name and style of Hakam Rai Nathu Mal till 31-3-1965. On 31-3-1965, Nathu Mal again effected partial partition in respect of his business assets between himself, his three sons Harbans Lal, Rajbans Lal, Chander Shekhar, wife Mansa Devi and four daughters Shobha, Asha, Rita and Dhablu. After the said partial partition, Nathu Mal with his son Harbans Lal converted the family business into that of registered partnership firm. However, immovable properties continued to be joint and the same continued to be assessed in the status of HUF till 1973-74 after which no return was filed. However, vide a registered deed termed as 'gift deed' dated 16-12-1969. Nathu Mal had earmarked the shares of his two wives and three sons in family properties and the said deed was registered. Even after the said deed was registered, the HUF of Nathu Mal offered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 964 Mys. 124 (SB), Kodasami v. Draisami ILR 2 Mad. 318 and CIT v. R.S. Singh Co. [1979] 118 ITR 30 (Cal). He submitted that the principles for which reliance was placed, was in this case that it is the intention of the parties indicated in the deed which should be taken into consideration. The law should be anxious to save the deed, if possible. Mere fact that the same was termed as 'gift deed', though it was deed of partition for all purposes, the revenue was unjustified in rejecting the assessee's claim. 4. The learned departmental representative, Mr. R.K. Bali, on the other hand, besides relying on the orders of the two lower authorities, in a very high tone submitted that the partition is bogus. He went to the extent that even the partitions granted by the ITO as early as in 1958 between Durga Dass and Nathu Mal was bogus, though how the same was granted is anybody's guess. He read and re-read the annexures to the ITO's order and submitted that partition has to be by metes and bounds and merely income from family properties cannot be shared without partition of the properties. He placed his reliance on the cases of Kalloomal Tapeswari Prasad (HUF) v. CIT [1982] 133 ITR 690 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt in the status of that of HUF till 1973-74 but when a question in that regard was put to Harbans Lal, who was present in the Court, as to why it was done, his unequivocal reply was that his lawyer knows it best. Even otherwise, according to us, it cannot be damaging to his claim of partition nor simply act of Harbans Lal not showing his part of rental income in his return of smaller HUF comprising of himself, his wife and children be damaging to the assessee's claim of partition. The fact that the entire sum in the form of rental income from all the properties was credited in the accounts of the firm which was distributed amongst coparceners in respect of properties which fell to their shares some time later, cannot be damaging to the assessee's claim. The learned departmental representative had drawn our attention to the ignorance of Kalpana, whose statement is produced as Annexure IV to the order of the ITO, who stated her ignorance about the said partition, cannot also be damaging to the claim of the assessee because Kalpana in 1969 was hardly five years' old and in what capacity and why she was examined, is best known to the ITO. Perusal of the statements of others, i.e., Har ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the common property. In the case of a partition there is a double or multiple release accompanied by the acquisition of full right by each of the co-owners in the portion of the common property allotted to him. Thus while every release may not represent a partition of the common property, every partition necessarily involves a double or multiple release. This only leads to the conclusion that a partition is a specific kind of release. If the statute contains two provisions, one relating to transactions which come, under a general category and the other to transactions under a special category though in the same general category the later transactions are necessarily governed by the provision relating to the special category of transactions." Similarly, when we look to the case of Kodasami, we find that in the said case a father who had five sons---three by one wife and two by another---had executed document in his last illness whereby after retaining a small portion for himself, he directed that the family property should be divided into three-fifths and two-fifths shares, with the manifest intention that from the date of the execution of the document it should operate as a seve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome which, according to their Lordships of the Supreme Court, could not be treated as a partition. In the instant case, properties were joint immovable properties till partition as shares were earmarked which is apparent from perusal of the deed dated 16-12-1969 and also from the application placed by the assessee before the ITO under section 171. Another Supreme Court decision in the case of Sree Meenakshi Mills Ltd., instead of the stand that of the revenue, supports the contention of the assessee because sum total of their Lordships' finding in the said case is thus: "When a conclusion has been reached on an appreciation of a number of facts established by the evidence, whether that is sound or not must be determined, not by considering the weight to be attached to each single fact in isolation, but by assessing the cumulative effect of all the facts in their setting as a whole." In the instant case when all the facts narrated above are taken into consideration, we find it a clear case of partition and the assessee's claim is ordered to be accepted under section 171. Similarly, statements of Harbans Lal, Rajbans Lal and Chander Shekhar cannot be read question-wise, the same ..... X X X X Extracts X X X X X X X X Extracts X X X X
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