{"id":30146,"date":"1982-01-12T00:00:00","date_gmt":"1982-01-11T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/kalloomal-tapeswari-prasad-vs-the-c-i-t-kanpurand-vice-on-12-january-1982"},"modified":"2019-04-13T16:51:13","modified_gmt":"2019-04-13T11:21:13","slug":"kalloomal-tapeswari-prasad-vs-the-c-i-t-kanpurand-vice-on-12-january-1982","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/kalloomal-tapeswari-prasad-vs-the-c-i-t-kanpurand-vice-on-12-january-1982","title":{"rendered":"Kalloomal Tapeswari Prasad … vs The C. I. T., Kanpur(And Vice … on 12 January, 1982"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Kalloomal Tapeswari Prasad … vs The C. I. T., Kanpur(And Vice … on 12 January, 1982<\/div>\n
Equivalent citations: 1982 AIR 760, \t\t 1982 SCR (3)\t 9<\/div>\n
Author: E Venkataramiah<\/div>\n
Bench: Venkataramiah, E.S. (J)<\/div>\n
           PETITIONER:\nKALLOOMAL TAPESWARI PRASAD (HUF), KANPUR\n\n\tVs.\n\nRESPONDENT:\nTHE C. I. T., KANPUR(AND VICE VERSA)\n\nDATE OF JUDGMENT12\/01\/1982\n\nBENCH:\nVENKATARAMIAH, E.S. (J)\nBENCH:\nVENKATARAMIAH, E.S. (J)\nPATHAK, R.S.\n\nCITATION:\n 1982 AIR  760\t\t  1982 SCR  (3)\t  9\n 1982 SCC  (1) 447\t  1982 SCALE  (1)11\n CITATOR INFO :\n R\t    1983 SC 409\t (13,22)\n R\t    1991 SC2035\t (6,7)\n\n\nACT:\n     Income Tax Act 1961, S. 171-Scope of.\n     Hindu Undivided  Family-Oral partition  in\t respect  of\nimmovable  properties-Properties   incapable   of   physical\ndivision   in\t equal\t shares-Capable\t  of   division\t  by\napportionment and  equalisation\t by  payment  of  money-Mere\nseverance of  status-Not sufficient  to\t record\t finding  of\npartition-Whether entitles  the inclusion  of income from an\nasset which  has ceased to belong to the joint family in the\nassessment of joint Hindu family.\n     Hindu Law-Partition-What is-How brought about-Partition\nmay be total or partial.\n\n\n\nHEADNOTE:\n     The assessee,  a Hindu  Undivided Family  was  deriving\nincome from  various sources  such as  income from property,\nincome from  money-lending business, income from speculation\nbusiness  and  cloth  business\tetc.  There  was  a  partial\npartition in the family in the year 1951, which was accepted\nand acted  upon by the Income tax department, whereafter the\ncloth business\twas  treated  as  the  business\t of  a\tfirm\nconsisting of  most  of\t the  coparceners  as  partners.  On\nDecember 1, 1963 which fell within the assessment year 1964-\n65 there  was another  partial partition orally, as a result\nof which  eighteen immovable properties were divided amongst\nthe ten\t members of the family, who held those properties as\ntenants-in-common from\tthat date.  These eighteen immovable\nproperties were\t situated  in  different  places  and  their\nvaluation was about Rs. 7 lacs.\n     In the  course of\tassessment proceedings; the assessee\nclaimed that  the members  of the  family had  commenced  to\nmaintain separate  accounts with  regard to  the income from\nthe eighteen  immovable properties  and to  divide the\tnett\nprofits amongst\t themselves according  to  their  respective\nshares at  the end of the year. When required by the Income-\ntax Officer  to explain\t as to\twhy the\t properties were not\ndivided in  definite portions  as required by section 171 of\nthe Income  Tax Act  1961, the assessee stated that physical\npartition of  the properties  amongst the  ten\tmembers\t was\nimpossible and\tthe only  way to  partition those properties\nwas to\tdefine the respective shares and to enjoy the income\nfrom them  separately. In support of his contention that the\nproperties did\tnot admit  of physical division the assessee\nrelied on  an arbitration  award. The Income-tax Officer did\nnot agree  with the  assessee's contention  that it  was not\npossible to  divide the\t properties in definite portions. He\nrejected the  claim of\tpartial partition  in respect of the\neighteen immovable  properties and  proceeded to  assess the\nincome derived therefrom in the hands of the assessee.\n10\n     The assessee  filed  an  appeal  before  the  Appellate\nAssistant Commissioner.\t During the  pendency of  the appeal\nthe assessee  appointed another\t arbitrator to\texamine\t the\npossibility of\tphysical division  of each  of the  eighteen\nproperties into\t ten portions.\tThe arbitrator\tby his award\nstated that  the properties  were not  capable\tof  physical\ndivision into  ten shares  by metes  and bounds and that any\npractical division  was that  of allocation of proportionate\nshares\tin   all  the  eighteen\t properties.  The  Appellate\nAssistant Commissioner\theld that  the case  of the assessee\nthat it was not possible to divide the properties physically\nas untenable and dismissed the appeal.\n     In further\t appeal to  the Tribunal,  the Tribunal held\nthat the  contention of\t the assessee that if the properties\nhad been divided into ten shares they would have been either\ndestroyed or  would have  lost their values was not correct,\nand that  the claim of the assessee under section 171 of the\nAct that there was a partial partition was to be rejected.\n     On an application by the assessee under section 256 (1)\nof the\tAct, the Tribunal referred two questions to the High\nCourt :\t (1) Whether  the Tribunal was right in holding that\nthe properties\tin  dispute  were  capable  of\tdivision  in\ndefinite   portions   amongst\tthe   ten   coparceners\t  as\ncontemplated in\t Explanation (a)  (i) to  section 171 of the\nAct, and  (2) whether  the Tribunal was justified in holding\nthat the  income from  the properties  in dispute which were\naccepted to  have been\tpartitioned under  the Hindu Law but\nwith regard to which an order accepting the claim of partial\npartition was  not made\t was liable  to be  included in\t the\ncomputation of the assessee's income ?\n     The High Court held : (1) that even though the eighteen\nproperties could not individually be divided into ten shares\nwithout destroying  their utility  but after  assessing\t the\nvalue of  the properties  they could  be apportioned between\nthe ten\t members and the difference in the allocations could\nbe equalised  by payment of cash amounts by one to the other\nand in\tview of clause (a) (i) of the Explanation to section\n171,  mere  severance  of  status  was\tnot  sufficient\t for\nrecording a  finding of\t partition; and\t (2) that the income\naccruing  from\t the  eighteen\timmovable  properties  after\nDecember 11,  1963 was\tnot liable  to be  included  in\t the\ncomputation of the joint Hindu Family's income.\n     Dismissing\t the  Assessee's  appeal  and  allowing\t the\nDepartment's appeal :\n^\n     HELD :  1. (i)  The law relating to assessment of Hindu\nundivided family  underwent a  change when the 1961 Act came\ninto  force.  Section  171  of\tthe  Act  provided  for\t the\nassessment after partition of a Hindu undivided family. [24-\nD]\n     (ii) A  finding to\t the effect that partition has taken\nplace has to be recorded under section 171 by the Income-tax\nOfficer. He  can record such a finding only if the partition\nin question  satisfies\tthe  definition\t of  the  expression\n'partition'  found   in\t Explanation   to  section   171.  A\ntransaction can\t be recognised\tas a partition under section\n171 only  if,  where  the  property  admits  of\t a  physical\ndivision a  physical division  of  the\tproperty  has  taken\nplace. In such a case mere physical\n11\ndivision of  the income\t without a  physical division of the\nproperty producing  income cannot be treated as a partition.\nEven where  the\t property  does\t not  admit  of\t a  physical\ndivision then such division as the property admits of should\ntake place  to satisfy the test of a partition under section\n171. Mere  proof of  severance of  status under Hindu Law is\nnot sufficient\tto treat  such a transaction as a partition.\nIf a  transaction does\tnot  satisfy  the  above  additional\nconditions it  cannot be  treated as  a partition  under the\nAct, even though under Hindu Law there has been a partition-\ntotal or partial. The consequence will be that the undivided\nfamily will be continued to be assessed as such by reason of\nsub-section (1) of section 171. [30-A-D]\n     (iii) It  is common  knowledge that  in every partition\nunder Hindu  Law unless\t the  parties  agree  to  enjoy\t the\nproperties as  tenants-in-common, the  need for\t division of\nthe family properties by metes and bounds arises and in that\nprocess physical division of several items of property which\nadmit of  such physical\t division does take place. It is not\nnecessary to  divide each  item into the number of shares to\nbe allocated  at a  partition. If a large number of items of\nproperty are  there, they  are\tusually\t apportioned  on  an\nequitable basis\t and if\t necessary by  asking the parties to\nmake payments  of money\t to  equalise  the  shares.  Such  a\npartition is  also  a  kind  of\t physical  division  of\t the\nproperties and is contemplated in the Explanation to section\n171. [34-C-E]\n     In the instant case no attempt to divide the properties\nwas made.  The case  clearly falls  under sub-clause  (i) of\nclause (a)  of the Explanation to section 171 of the Act but\ndoes not  satisfy the  requirement of  that sub-clause as no\nphysical division  of the  properties was  made even  though\nthey could  be\tconveniently  so  divided.  Sub-clause\t(ii)\ntherefore does not apply to this case. [35-B]\n     2. (i) The High Court having held that the assessee was\nnot entitled  to claim\tthat a\tpartial partition  had taken\nplace under  section 171, fell into an error in holding that\nthe income  of the  properties which were the subject-matter\nof partial  partition could  not be  included in  the  total\nincome of  the assessee\t by relying upon the decisions which\nhad been  rendered on  the basis  of section 25A of the 1922\nAct which  had been  construed as  not being  applicable  to\npartial partition. [35-D]\n     (ii) The  true  effect  of\t section  171  (1)  is\tthat\nproperty, which\t is the\t subject-matter of partial partition\nwould continue\tto be treated as belonging to the family and\nits income would continue to be included in its total income\nuntil such a finding is recorded. [35-G]\n     (iii)  Sub-section\t  (1)  of  section  171\t contains  a\n'deeming' provision.  It says  that a  Hindu family hitherto\nassessed as undivided shall be deemed for the purpose of the\nAct to\tcontinue to be a Hindu undivided family except where\nand in so far as a finding of partition has been recorded in\nrespect of  it under  section 171. The partition referred to\nin the\tsection can  include a partial partition also either\nas regards  the persons constituting the undivided family or\nthe properties\tbelonging to  it or  both, in  view  of\t the\nprovisions  contained  in  the\tother  subsections  and\t the\nExplanation to the section. [29-F-G]\n12\n     (iv) Where\t there is no claim that a partition-total or\npartial-had taken  place  made\tor  where  it  is  made\t and\ndisallowed a  Hindu undivided family which is hitherto being\nassessed  as   such  will   have  to  be  assessed  as\tsuch\nnotwithstanding the fact a partition had in fact taken place\nas per Hindu law. A finding to the effect that partition had\ntaken place  has to  be recorded  under section\t 171 by\t the\nIncome-tax Officer. He can record such a finding only if the\npartition  in  question\t satisfies  the\t definition  of\t the\nexpression 'partition'\tfound in Explanation to section 171.\nThe transaction\t can be\t recognised  as\t a  partition  under\nsection 171 only if where the properties admit of a physical\ndivision, a  physical division\tof the\tproperty  has  taken\nplace. In  such a  case mere physical division of the income\nwithout a physical division of the property producing income\ncannot be  treated as  a partition.  Even where the property\ndoes not,  admit of a physical division then such a division\nas the\tproperty admits\t of should take place to satisfy the\ntest of\t a  partition  under  section  171.  Mere  proof  of\nseverance of  status under  Hindu Law  is not  sufficient to\ntreat such  a transaction  as a\t partition. If a transaction\ndoes not  satisfy the  additional  condition  it  cannot  be\ntreated as a partition under the Act even though under Hindu\nLaw there  has\tbeen  a\t partition  total  or  partial.\t The\nconsequence will  be  that  the\t undivided  family  will  be\ncontinued to  be assessed  as such  by reason of sub-section\n(1) of section 171. [29 G-H,30 A-D]\n     Govinddas &  Ors. v.  Income-tax Officer & Anr.,<\/a> [1976]\n193 I.T.R.  123; Charandas Haridas & Anr. v. Commissioner of\nIncome-tax, Bombay  North, Kutch  & Saurashtra,\t Ahmedabad &\nAnr.,<\/a> [1960] 39 I.T.R. 203; A. Kannan Chetty v. Commissioner\nof Income-tax, Madras, [1963] 50 I.T.R. 601; referred to.\n     (v) As  long as a finding is not recorded under section\n171 that  a partial  partition had  taken  place  the  Hindu\nundivided family  should be  deemed for\t the purposes of the\nAct to\tbe the\towner of  the property\twhich is the subject\nmatter of the partition and also the recipient of the income\nfrom such  property. The  assessment should  be made as such\nand the\t tax assessed  can be  recovered as  provided in the\nAct. [36 F-G]\n     3. Under section 25A of the 1922 Act, a Hindu undivided\nfamily which  had been\tassessed to  tax could be treated as\nundivided and  subjected to tax under the Act in that status\nunless and until an order was made under section 25A (1) and\nif in the course of the assessment proceedings it is claimed\nby any\tof the\tmembers of  the Hindu  undivided family that\nthere has  been\t total\tpartition  of  the  family  property\nresulting in physical division thereof as it was capable of,\nthe assessing  authority should\t hold an  enquiry and decide\nwhether there  has been\t such a partition or not. If he held\nthat such  a partition had taken place, he should proceed to\nmake an\t assessment of\tthe total income of the family as if\nno partition  had taken\t place and then proceed to apportion\nthe  liability\t as  stated   in  section  25A\tamongst\t the\nindividual members of the family. If no claim was made or if\nthe claim  where  it  was  made\t was  disallowed  after\t the\nenquiry, the  Hindu undivided  family would  continue to  be\nliable to be assessed as such.\n\t\t\t\t\t    [23 G-H, 24 A-C]\n     4. When  Parliament enacted section 171 it took note of\nthe decisions  which had  taken\t the  view  that  a  partial\npartition did  not fall\t within the scope of section 25A. It\nexpressly stated  in section  171 of  the Act  that the said\nprovision\n13\nwas applicable to both kinds of partitions-total or partial.\nIt has\talso defined  partial  partition  as  one  which  is\npartial as regards persons constituting the undivided family\nor as  regards the  properties belonging  to  the  undivided\nfamily or  both. It  deals with all kinds of partitions, the\nnature of  which sometimes  may be  difficult  to  predicate\ncorrectly. [31 D-E]\n     Sir  Sunder  Singh\t Majithia  v.  The  Commissioner  of\nIncome-tax. C.P. & U.P.,<\/a> [1942] 10 I.T.R. 457, Gordhandas T.\nMangaldas v.  Commissioner of  Income-tax Bombay,  [1943] 11\nI.T.R. 183,  Waman Satwappa  Kalghatgi\tv.  Commissioner  of\nIncome-tax [1946]  14 I.T.R. 116, M.S.M.S. Meyyappa Chettiar\nv. Commissioner of Income-tax, Madras,<\/a> [1950] 18 I.T.R. 586,\nLakhmtchand Baijnath  v.  Commissioner\tof  Income-tax\tWest\nBengal,<\/a> [1959]\t35 I.T.R.  416, Kalwa  Devadatta and Ors. v.\nVnion of  India and  Ors.,  [1963]  49\tI.T.R.\t[S.C.]\t165,\nAdditional Income-tax  Officer, Cuddapah v. A. Thimmayya and\nAnr.,<\/a> [1965] 55 I.T.R. 666, Joint Family of Vdayan Chinubhai\netc. v.\t Commissioner  of  Income-tax,\tGujarat,  [1967]  63\nI.T.R. 416, referred to.\n     5. Partition  may be  several kinds.  It may be a total\npartition or  a partial partition. A partition can be called\npartial both  as regards  persons and as regards properties.\nThe next  kind of partition may be one where all the members\ndivide amongst themselves only some of the family properties\nand continue  as members  of an\t undivided family  owing the\nremaining  family  properties.\tThis  is  called  a  partial\npartition as regards property. Even here the division of the\nproperty which is subject matter of partial partition may be\ngroupwise also.\t In the\t case  of  a  partial  partition  as\nregards property,  one thing  noticeable is  that after such\npartition, the property which is subject-matter of partition\nis held\t by the\t members of  the family as tenants-in-common\nand the rest of the family properties continue to be held by\nthem as members of the undivided family.\n\t\t\t\t\t    [31 F-H, 32 A-E]\n     6. After  a partial  partition as regards property, the\nproperty divided  is held  by the  members of  the undivided\nfamily as  divided members  with all  the incidents  flowing\ntherefrom and  the property  not so divided as members of an\nundivided family.  Section 171 (1) of the Act can, therefore\noperate in  such a  case also  because the  family which has\nbecome divided\tas regards the property which is the subject\nmatter of  partial partition  is deemed\t to continue  as the\nowner of  that property\t and the  recipient  of\t the  income\nderived from  it except\t where and in so far as a finding of\npartition has been given under section 171. [32 F-G]\n     7. Partition  can be  brought about,  (1) by  a  father\nduring his  life  time\tbetween\t himself  and  his  sons  by\ndividing properties  equally amongst them, (2) by agreement,\nor (3)\tby a suit or arbitration. A declaration of intention\nof a  coparcener to become divided brings about severance of\nstatus. [27 E\n     8. A  physical division  of the  property which  is the\nsubject matter of partition is not necessary to complete the\nprocess of  partition in  so far  as the item of property is\nconcerned under\t Hindu Law. The parties to the partition may\nenjoy the property in question as tenants-in-common. [27 G\n     Appovier v.  Rama Subba  Aiyan  [1866]  11\t M.I.A,\t 75,\nreferred to.\n14\n     9. Hindu Law does not require that the property must in\nevery case  be partitioned by metes and bounds or physically\ninto different\tportions to complete a partition. Disruption\nof status can be brought about and it is open to the parties\nto enjoy  their shares\tof property  as tenants-in-common in\nany manner known to law according to their desire.[28-C]\n\n\n\nJUDGMENT:\n<\/pre>\n
     CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 1370\/74
\nand 1768 of 1975.\n<\/p>\n
     From the  judgment and  order dated the 29th September,
\n1972 of the Allahabad High Court in Income-Tax Reference No.
\n47 of 1971.\n<\/p>\n
     S.T. Desai\t J.B.  Dadachanji  and\tK.J.  John  for\t the
\nAppellant  in  C.A.  1370\/74  and  for\tRespondent  in\tC.A.
\n1768\/75.\n<\/p>\n
     V.S. Desai, Miss A. Subhashini, K.C. Dua and S.P. Nayar
\nfor the\t Respondent in\tCA. 1370\/74 and for the Appellant in
\nCA. 1768\/75.\n<\/p>\n
     The Judgment of the Court was delivered by
\n     VENKATARAMIAH, J.\tThese two appeals by certificate-one
\nby the assessee and the other by the Commissioner of Income-
\ntax, Kanpur  are filed\tagainst the judgment and order dated
\nSeptember 29,  1972 of\tthe  High  Court  of  Judicature  at
\nAllahabad in  Income-tax Reference  No.\t 47  of\t 1971  under
\nsection 256(1)\tof the\tIncome-tax  Act,  1961\t(hereinafter
\nreferred to  as ‘the  Act’) made by the Income tax Appellate
\nTribunal.  Allahabad   Bench,  Allahabad   (for\t short\t‘the
\nTribunal’). The\t two questions\twhich were  referred by\t the
\nTribunal for the opinion of the High Court were:\n<\/p>\n
     “(1) Whether on  the facts\t and in the circumstances of
\n\t  the case  the Tribunal  was right  in holding that
\n\t  the properties in dispute were capable of division
\n\t  in definite portions amongst the 10 coparceners as
\n\t  contemplated in Explanation (a) (i) to section 171
\n\t  of  the   Income  tax\t Act,  1961  and  that\teven
\n\t  otherwise the\t mere severance\t of status  was\t not
\n\t  sufficient to\t entitle the  assessee to succeed in
\n\t  its claim for partial partition ?<\/p>\n
     (2)  Whether on  the facts\t and in the circumstances of
\n\t  the case  the Tribunal  was justified\t in  holding
\n\t  that the
\n15<\/span>
\n\t  income from  the properties  in dispute which were
\n\t  accepted to  have been partitioned under the Hindu
\n\t  law but  with regard\tto which  an order accepting
\n\t  the claim  of partial\t partition was\tnot made was
\n\t  liable to  be included  in the  computation of the
\n\t  assessee’s income ?”\n<\/p><\/blockquote>\n
     The assessee  is a Hindu undivided family known as M\/s.\n<\/p><\/blockquote>\n
Kalloomal Tapeshwari  Prasad and  the year  of assessment is
\n1964.65. The  assessee is  governed by the Mitakshara school
\nof law.\t The  following\t genealogical  tree  represents\t the
\nrelationship amongst the members of the family:\n<\/p>\n
\t\t\tPhakki Lal
\n     ________________________________________________
\n     |\t\t\t      |\t\t\t     |
\n     |\t\t\t      |\t\t\t     |
\n     Chandoolal\t\t Bishambhar Nath\tSitaram
\n     (His Wife Rampiari\t (dies issueless\t(wife-kripa
\n     died on 17.9.63)\t on 1940-wife\t\t       Devi)
\n\t  |\t\t\t\t\t       |
\n\t  |\t\t\t\t\t       |
\n\t  |\t\t\t\t\t       |
\n\t  |\t\t\t\t     ______________
\n\t  |\t\t\t\t     |\t\t  |
\n\t  |\t\t\t\t     |\t\t  |
\n\t  |\t\t\t\tGopalji\t       Ramji
\n     ___________________________________________
\n     |\t       |\t |\t   |\t     |
\n     Jagat    Roop     Swarup\t Shyam\t   Bimal
\n     Narian   Narain   Narain\t Narian\t   Narian
\n     During the relevant previous year, the family consisted
\nof Chandoolal,\tSitaram\t and  his  wife\t Kripa\tDevi,  Jagat
\nNarain, Roop  Narain, Swarup  Narain, Shyam Narain and Bimal
\nNarain who  were the five sons of Chandoolal and Gopalji and
\nRamji,\tthe   two  Sons\t of  Sitaram.  The  assessee  (Hindu
\nundivided family)  was deriving\t income from various sources
\nsuch as\t income from  property, income\tfrom  money  lending
\nbusiness,  income   from  speculation\tbusiness  and  cloth
\nbusiness etc. There was a partial partition in the family in
\nthe year  1951 when  a sum  of Rs. 5,00,000 out of its total
\ncapital of Rs. 12,85,423 was divided amongst the coparceners
\nat  the\t  rate\tof   Rs.  41,666110\/8\tamongst\t members  of
\nChandoolal’s branch  and  at  the  rate\t of  Rs.  83,333\/5\/4
\namongst the  members of Sitaram’s branch. Kripa Devi did not
\nreceive any  share  at\tthat  partition.  The  said  partial
\npartition was accepted and acted upon by
\n16<\/span>
\nthe Income-tax Department where after the cloth business was
\ntreated as  the business of a firm consisting of most of the
\ncoparceners as\tpartners. Again\t on December  11, 1963 which
\nfell within  the previous  year relevant  for the assessment
\nyear in\t question i.e.\t1964-65, according  to the assessee,
\nthere was  another partial  partition orally  as a result of
\nwhich its eighteen immovable properties were divided amongst
\nthe ten\t members of  the family\t and that  they\t held  those
\nproperties as  tenants-in-common  from\tthat  date.  It\t was
\nclaimed by  the assessee  in the  course of  the  assessment
\nproceedings that  the members of the family had commenced to
\nmaintain separate  accounts with  regard to  the income from
\nthe said  eighteen properties  and to divide the net profits
\namongst themselves  according to  their respective shares at
\nthe end of each year. The eighteen immovable properties were
\nsituated in  different places  and their  valuation  was  as
\nfollows:\n<\/p><\/blockquote>\n
S. No.\t       Municipal number of\t\t  Value\n\t\t the property\n1.\t\t  75\/2\t\t\t\t 1,78,875\/-\n2.\t\t  76\/162\t\t\t   27,000\/-\n3.\t\t  76\/169\t\t\t   45,000\/-\n4.\t\t  47\/110\t\t\t   13,500\/-\n5.\t\t  47\/26\t\t\t\t   20,700\/-\n6.\t\t  48\/203\t\t\t   16,200\/-\n7.\t\t  55\/124\t\t\t   90,000\/-\n8.\t\t  55\/36}\n9.\t\t  55\/37}\t\t\t   41,400\/-\n10.\t\t  70\/87\t\t\t\t 1,57,500\/-\n11.\t\t  71\/150\t\t\t    8,100\/-\n12.\t\t  71\/89\t\t\t\t    3,600\/-\n13.\t\t  71\/112\t\t\t   19,800\/-\n14.\t\t  63\/61\t\t\t\t    7,425\/-\n15.\t\t  51\/68\t\t\t\t   17,100\/-\n16.\t\t  s\n51\/73\t\t\t\t 14,400\/-\n17.\t\t  86\/37\t\t\t\t   20,520\/-\n18.\t\t  1\/301A\t\t\t   45,000\/-\n\t\t\t\t\t\t ----------\n\t\t\t\t\t\t  7,26,120\/-\n\t\t\t\t\t\t  ----------\n17<\/span>\n<\/pre>\n
     When required  by the  Income-tax Officer to explain as
\nto why\tthe properties were not divided in definite portions
\nas required  by section\t 171 of the Act, the assessee stated
\nthat physical division of the properties in question amongst
\nthe ten\t members was impossible and the only possible way to
\npartition those\t properties was\t to define  their respective
\nshares and  to enjoy  the income  from them  separately.  In
\nsupport of  the above  claim the assessee relied upon a copy
\nof an  award dated  April 15,  1964 made  by one S.B. Tandon
\nwhich was  made into  a decree in Suit No. 60 of 1964 on the
\nfile of\t the Court  of the  First Civil\t Judge, Kanpur dated
\nSeptember 21,  1964. In that award the arbitrator had stated
\nthat the  properties did not admit of physical division. The
\nIncome-tax  Officer   did  not\tagree  with  the  assessee’s
\ncontention that it was not possible to divide the properties
\nin question  in definite  portions. Accordingly\t he rejected
\nthe claim  of partial  partition in  respect of the eighteen
\nimmovable properties  and proceeded  to\t assess\t the  income
\nderived therefrom  in the hands of the assessee. Against the
\norder of  the Income-tax  Officer,  the\t assessee  filed  an
\nappeal\tbefore\t the  Appellate\t Assistant  Commissioner  of
\nIncome-tax. During  the pendency of that appeal the assessee
\nappointed another arbitrator by the name Lakhsman Swaroop, a
\nretired Chief  Engineer to  examine  the  possibility  of  a
\nphysical division  of each  of the  eighteen properties into
\nten portions  and if  that was\tnot possible  to suggest any
\nother mode  or modes  to  divide  them\tinto  ten  parts  in
\naccordance with the share allotted to each of the parties to
\nthe partition. By his award dated February 3, 1965, Lakshman
\nSwaroop stated\tthat  the  aforesaid  properties  were\t“not
\ncapable of  physical division  into ten\t shares by metes and
\nbounds and that any practical division is that of allocation
\nof  proportionate   shares  in\tall  the  18  properties  in
\nquestion.” It  may be  mentioned here  that out\t of the\t ten
\nshares, six  shares were  1\/12th each  and four\t shares were
\n1\/8th each.  Chandoomal and  his five sons had been allotted
\n1\/12th each  and Sitaram  his wife and his two sons had been
\nallotted 1\/4th each. Lakshman Swaroop was also examined as a
\nwitness before\tthe Appellate  Assistant Commissioner by the
\nassessee and  cross-examined by\t the Income tax Officer. The
\nAppellate Assistant  Commissioner on  a consideration of the
\nmaterial before\t him  including\t the  decree  of  the  court
\nreferred to  above and the evidence of Lakshman Swaroop held
\nthat the  case of  the assessee\t that it was not possible to
\ndivide the properties physically into ten shares referred to
\nabove  was   not  tenable  and\tdismissed  the\tappeal.\t The
\nassessee, thereafter  took up the matter before the Tribunal
\nin appeal.  The Tribunal  also was  of\tthe  view  that\t the
\ncontention of the assessee that if the properties had
\n18<\/span>
\nbeen divided  into ten\tshares, they  would have either been
\ndestroyed or  would have  lost in  value  was  not  correct.\n<\/p><\/blockquote>\n
Accordingly the\t claim of  the assessee under section 171 of
\nthe Act\t that there  was a  partial partition  was rejected.
\nThereupon on  an application  of  the  assessee\t made  under
\nsection 256(1)\tof the\tAct, the two questions set out above
\nwere referred  by the  Tribunal to  the High  Court for\t its
\nopinion.\n<\/p>\n
     After hearing  the parties, the High Court recorded its
\nanswer to  the first  question in  the\taffirmative  and  in
\nfavour of the Department and in reaching that conclusion, it
\nobserved thus:\n<\/p>\n
\t  “We have  seen the  evidence of  the arbitrator as
\n     well as  the Chief\t Engineer, and\tit is apparent there
\n     from that\teven though  the  18  properties  could\t not
\n     individually  be\tdivided\t into\t10  shares   without
\n     destroying their  utility but after assessing the value
\n     of the  properties, they  could be\t apportioned between
\n     the ten  members and  the difference in the allocations
\n     could be equalised by payment of cash amounts by one to
\n     the other.\t In  our  opinion,  it\tcannot,\t in  such  a
\n     situation,\t be  said  that\t these\t18  properties\twere
\n     incapable of physical division in 10 shares, and so, in
\n     view  of  clause  (a)  (i)\t of  the  Explanation,\tmere
\n     severance of  status was not sufficient for recording a
\n     finding of partition.”<\/p><\/blockquote>\n
     The High  Court answered  the second question in favour
\nof the\tassessee holding  that the  income accruing from the
\neighteen immovable  properties after  December 11,  1963 was
\nhowever not  liable to be included in the computation of the
\njoint Hindu  family’s income.  In recording this answer, the
\nHigh Court observed thus:\n<\/p>\n
\t  “Sec. 171  of the  1961 Act  in essence,  is a re-
\n\t  actment of  Sec. 25A\twith the  difference that it
\n\t  applies not  only to\tcases of total partition but
\n\t  also to cases of partial partition. There are some
\n\t  incidental changes  as well, e.g. sec. 171 applies
\n\t  also\tfor   purposes\tof  levying  and  collecting
\n\t  penalty, fine or interest and in addition requires
\n\t  the Income-tax  Officer to  record a finding as to
\n\t  the date  on which total or partial partition took
\n\t  place. The fact that sec. 171 applies to a partial
\n\t  partition (meaning a partition which is partial as
\n19<\/span>
\n\t  regards the  persons or  as regards the properties
\n\t  of the  family or  both)  as\twell  shows  that  a
\n\t  finding of  partial partition\t can be recorded and
\n\t  on such a finding being recorded under sub-section
\n\t  (4) the  total  income  of  the  joint  family  in
\n\t  respect of  the period  upto the date of partition
\n\t  is to\t be assessed  as if  no partition  had taken
\n\t  place and  each member  of the  family was  to  be
\n\t  liable,  notwithstanding   anything  contained  in
\n\t  clause (2)  of sec.  10, jointly and severally for
\n\t  the tax  on the income so assessed. Thus sec. 171,
\n\t  like sec. 25A, seeks to nullify the effect of sec.
\n\t  10 (2)  under which  a member was not liable to be
\n\t  taxed on  the income received as a member of Hindu
\n\t  undivided family. The section does not entitle the
\n\t  inclusion of income from an asset which has ceased
\n\t  to belong  to the  joint family, in the assessment
\n\t  of the joint Hindu family.\n<\/p><\/blockquote>\n
\t       In the  present case,  on the  findings,\t the
\n\t  position is  that the\t joint\tHindu  family  stood
\n\t  disrupted  in\t  relation  to\t the  18   immovable
\n\t  properties as a result of the oral partition dated
\n\t  11th December,  1963.\t Thereafter  the  income  of
\n\t  these\t properties   belonged\tto   the  individual
\n\t  members and  not to the joint family. It could not
\n\t  be included in the assessment of the family.”<\/p><\/blockquote>\n
     Aggrieved by  the answer  to the  first  question,\t the
\nassessee has  filed  Civil  Appeal  No.\t 1370  of  1974\t and
\naggrieved by  the answer to the second question, the Revenue
\nhas filed Civil Appeal No. 1768 of 197.\n<\/p>\n
     It is necessary to refer to the history of the relevant
\nprovisions in  order to\t decide the  questions raised before
\nus. Under  the Indian  Income-tax Act,\t1922 (for short ‘the
\n1922 Act’) a Hindu undivided family could be assessed on its
\nincome. Section\t 3 of  the 1922 Act laid down that where any
\nCentral Act  enacted that  income-tax should  be charged for
\nany year  at any  rate or  rates, tax  at that rate or those
\nrates should be charged for that year in accordance with and
\nsubject to  the provisions  of that  Act in respect of total
\nincome of  the previous\t year  of  every  individual,  Hindu
\nundivided family  etc. But  section 14\t(1) of\tthe 1922 Act
\nprovided that  no tax  was payable by an individual assessee
\nin respect  of any  sum which  he received  as a member of a
\nHindu undivided\t family where  such sum had been paid out of
\nthe income of the family. Section 25-A was
\n20<\/span>
\ninserted in  the 1922 Act in the year 1928 providing for the
\nmachinery  for\t assessment  after   partition\tof  a  Hindu
\nundivided family. That section immediately before the repeal
\nof the 1922 Act read as follows:\n<\/p>\n
\t  “25A.\t Assessment   after  partition\tof  a  Hindu
\n\t  undivided family-(1)\tWhere, at the time of making
\n\t  an assessment\t under section\t23, it is claimed by
\n\t  or on\t behalf of  any member\tof  a  Hindu  family
\n\t  hitherto assessed  as undivided  that a  partition
\n\t  has taken  place among the members of such family,
\n\t  the Income-tax  Officer shall\t make  such  inquiry
\n\t  there-into as\t he may\t think fit,  and, if  he  is
\n\t  satisfied that  the joint family property has been
\n\t  partitioned among the various members or groups of
\n\t  members in  definite portions\t he shall  record an
\n\t  order to that effect:\n<\/p><\/blockquote>\n
\t       Provided that no such order shall be recorded
\n\t  until notices\t of the\t inquiry have been served on
\n\t  all the members of the family.\n<\/p><\/blockquote>\n
\t       (2) Where  such an  order has been passed, or
\n\t  where any  person has\t succeeded  to\ta  business,
\n\t  profession or\t vocation formerly  carried on\tby a
\n\t  Hindu undivided family whose joint family property
\n\t  has been  partitioned on  or after the last day on
\n\t  which it  carried on\tsuch business, profession or
\n\t  vacation, the\t Income-tax Officer  shall  make  an
\n\t  assessment of\t the total  income received by or on
\n\t  behalf of  the joint\tfamily as  such,  as  if  no
\n\t  partition had\t taken place,  and  each  member  or
\n\t  group of members shall, in addition to any income-
\n\t  tax for  which he  or it  may be separately liable
\n\t  and notwithstanding  anything\t contained  in\tsub-
\n\t  section (1)  of section  14, be liable for a share
\n\t  of the  tax on the income so assessed according to
\n\t  the portion  of the joint family property allotted
\n\t  to him  or it;  and the  Income-tax Officer  shall
\n\t  make\tassessments   accordingly  on\tthe  various
\n\t  members and  groups of  members in accordance with
\n\t  the provisions of section 23:\n<\/p><\/blockquote>\n
\t       Provided that  all the  members and groups of
\n\t  members  whose  joint\t family\t property  has\tbeen
\n\t  partitioned
\n21<\/span>
\n\t  shall be  liable jointly has severally for the tax
\n\t  assessed on  the total  income received  by or  on
\n\t  behalf of the joint family as such.\n<\/p><\/blockquote>\n
\t       (3) Where  such an  order has not been passed
\n\t  in respect  of Hindu\tfamily hitherto\t assessed as
\n\t  undivided, such  family shall\t be deemed,  for the
\n\t  purposes of  this Act,  to continue  to be a Hindu
\n\t  undivided family”.<\/p><\/blockquote>\n
     Section  25-A   of\t the  1922  Act\t as  it\t stood\tthen
\n(subsequent modifications  in it  being immaterial  for\t the
\npurposes of  this case)\t came up  for consideration  by\t the
\nJudicial Committee  of the Privy Council in Sir Sunder Singh
\nMajithia v.  The Commissioner  of Income-tax, C.P. and U.P..
\nThe Privy  Council<\/a> held\t that section  25-A of\tthe 1922 Act
\nprovided that  if it  be found\tthat the family property had
\nbeen partitioned  in definite  portions, assessment might be
\nmade, notwithstanding  section 14(1)  on each  individual or
\ngroup in  respect of his or its share of the profits made by
\nthe undivided  family, while holding all the members jointly
\nand severally  liable for  the tax. It was further held that
\nif, however,  though the  joint Hindu  family had come to an
\nend, it\t be found that its property had not been partitioned
\nin definite  portions then  the family\twas to\tbe deemed to
\ncontinue-that is,  to be an existent Hindu family upon which
\nassessment could  be made on its gains of the previous year.
\nBut it\twas of the view that section 25-A had nothing to say
\nabout  any   Hindu  undivided\tfamily\twhich  continued  in
\nexistence never\t having been disrupted. Such a case was held
\nto fall\t outside sub-section  (3) of  section  25-A  and  in
\neffect, it held that the said section did not apply to cases
\nof partial partition.\n<\/p>\n
     In Gordhandas  T. Mangaldas  v. Commissioner of Income-
\ntax, Bombay,  Kania, J.\t (as he\t then was)  who agreed\twith
\nBeaument, C.J.\texplained the  scheme of section 25-A of the
\n1922 Act (as it stood then) in his concurring judgment thus:\n<\/p>\n
\t       “It is material to bear in mind the scheme of
\n\t  the Income-tax  Act, in  the first instance. Under
\n\t  sections  2  and  3  the  different  units  stated
\n\t  therein are  liable to  be taxed  as such.  One of
\n\t  them is  a joint  Hindu family.  In order to avoid
\n\t  double taxation, Section 14 lays down
\n22<\/span>
\n\t  that when the individual member is being assessed,
\n\t  his income  as member of a joint family should not
\n\t  be assessed  again. Then  comes  the\tstage,\twhat
\n\t  happens when\ta family,  which has  once  been  so
\n\t  assessed, comes  to  a  partition.  To  meet\tthat
\n\t  contingency, Section 25-A has been enacted. In the
\n\t  section, as  it existed  before the  amendment  of
\n\t  1939, in  terms the  Income-tax  Officer  required
\n\t  proof, (i) that a separation of the members of the
\n\t  joint family\thad taken  place and  (ii) that\t the
\n\t  joint family property had been partitioned amongst
\n\t  the  various\tmembers\t or  groups  of\t members  in
\n\t  definite portions.  On being\tsatisfied  on  those
\n\t  points he  had to  record an order to that effect.
\n\t  The effect  of such a recording was that the joint
\n\t  family income\t would be  assessed and recovered in
\n\t  terms of  sub-section (2).  In the absence of such
\n\t  order, under\tsub-section  (3)  the  joint  family
\n\t  continued to be assessed as before.”<\/p><\/blockquote>\n
     The same  view was followed in Waman Satwappa Kalghatgi
\nv. Commissioner\t of  Income-tax\t and  in  M.S.M.S.  Meyyappa
\nChettiar v. Commissioner of Income-tax, Madras.\n<\/p>\n
     This Court\t had to consider the true meaning of section
\n25-A of the 1922 Act in Lakhmichand Baijnath v. Commissioner
\nof Income-tax,\tWest Bengal.  Venkatarama Aiyar, J.<\/a> speaking
\nfor the Court observed in the above case thus:-\n<\/p>\n
\t       “Now, when  a claim is made under section 25-
\n\t  A, the  points to  be decided\t by  the  Income-tax
\n\t  Officer are  whether there has been a partition in
\n\t  the family,  and if so, what the definite portions
\n\t  are in  which the division had been made among the
\n\t  members or  groups of\t members. The question as to
\n\t  what the  income of  the family  assessable to tax
\n\t  under section\t 23 (3)\t was would be foreign to the
\n\t  scope of  and enquiry\t under\tsection\t 25-A.\tThat
\n\t  section was, it should be noted, introduced by the
\n\t  Indian Income-tax  (Amendment)  Act,\t1928  (3  of
\n\t  1928) for removing a defect which the
\n23<\/span>
\n\t  working  of\tthe  Act  as  enacted  in  1922\t had
\n\t  disclosed. Under the provisions of the Act as they
\n\t  stood prior  to the  amendment, when\tthe assessee
\n\t  was an  undivided family,  no assessment  could be
\n\t  made thereon\tif at  the time of the assessment it
\n\t  had become divided, because at that point of time,
\n\t  there was  no undivided  family in existence which
\n\t  could\t be   taxed,  though  when  the\t income\t was
\n\t  received in  the year\t of account  the family\t was
\n\t  joint. Nor  could the\t individual members  of\t the
\n\t  family be  taxed in  respect of such income as the
\n\t  same is  exempt from\ttax under  section 14 (1) of
\n\t  the Act. The result of these provisions was that a
\n\t  joint family\twhich had become divided at the time
\n\t  of assessment\t escaped tax  altogether. To  remove
\n\t  this defect,\tsection 25-A  enacted that  until an
\n\t  order is  made  under\t that  section,\t the  family
\n\t  should be  deemed  to\t continue  as  an  undivided
\n\t  family. When\tan order is made under that section,
\n\t  the family  should be\t deemed to  continue  as  an
\n\t  undivided family. When an order is made under that
\n\t  section, its\teffect is that while the tax payable
\n\t  on the  total\t income\t is  apportioned  among\t the
\n\t  divided members  or groups, all of them are liable
\n\t  for the  tax payable\ton the\ttotal income  of the
\n\t  family. What\tthat tax  is  would  depend  on\t the
\n\t  assessment of\t income in  proceedings taken  under
\n\t  section 23,  and an order under section 25-A would
\n\t  have no effect on that assessment.”<\/p><\/blockquote>\n
     The above\tview was  reiterated by\t this Court in Kalwa
\nDevadattam and Ors. v. Union of India and Ors.<\/a> in Additional
\nIncome-tax Officer,  Cuddapah v.  Thimmayya and\t Anr. and<\/a> in
\nJoint family  of Udayan\t Chinubhai etc.\t v. Commissioner  of
\nIncome-tax, Gujarat.  The substance  of all  these decisions
\nwas that  under\t section  25-A\tof  the\t 1922  Act  a  Hindu
\nundivided family  which had  been assessed  to tax  could be
\ntreated as  undivided and  subjected to tax under the Act in
\nthat status unless and until an order was made under section
\n25-A (1)  and if in the course of the assessment proceedings
\nit is  claimed by  any of the members of the Hindu undivided
\nfamily that there
\n24<\/span>
\nhas been total partition of the family property resulting in
\nphysical  division   thereof  as  it  was  capable  of,\t the
\nassessing  authority  should  hold  an\tenquiry\t and  decide
\nwhether there  had been\t such a partition or not. If he held
\nthat such  a partition had taken place, he should proceed to
\nmake an\t assessment of\tthe total income of the family as if
\nno partition  had taken\t place and then proceed to apportion
\nthe  liability\t as  stated  in\t section  25-A\tamongst\t the
\nindividual members of the family. If no claim was made or if
\nthe claim  where it  was made  was disallowed after enquiry,
\nthe Hindu undivided family would continue to be liable to be
\nassessed as such. This was the legal position under the 1922
\nAct.\n<\/p>\n
     The law  relating\tto  assessment\tof  Hindu  undivided
\nfamily, however,  underwent a  change when the Act came into
\nforce. Section\t171 of\tthe Act which corresponds to section
\n25-A of the 1922 Act reads thus:\n<\/p>\n
     “171.(1)  A Hindu family hitherto assessed as undivided
\n\t       shall be\t deemed for the purposes of this Act
\n\t       to continue  to be  a Hindu undivided family,
\n\t       except where  and in  so far  as a finding of
\n\t       partition has  been given  under this section
\n\t       in respect of the Hindu undivided family.
\n\t  (2)  Where, at  the time  of making  an assessment
\n\t       under section  143  or  section\t144,  it  is
\n\t       claimed by  or on  behalf of  any member of a
\n\t       Hindu family  assessed as  undivided  that  a
\n\t       partition,  whether  total  or  partial,\t has
\n\t       taken place among the members of such family,
\n\t       the Income-tax  Officer shall make an inquiry
\n\t       thereinto after\tgiving notice of the inquiry
\n\t       to all the members of the family.\n<\/p><\/blockquote>\n
\t  (3)  On the completion of the inquiry, the Income-\n<\/p><\/blockquote>\n
\t       tax Officer  shall record  a  finding  as  to
\n\t       whether there  has been\ta total\t or  partial
\n\t       partition of  the joint family property, and,
\n\t       if there\t has been such a partition, the date
\n\t       on which it has taken place.\n<\/p><\/blockquote>\n<\/blockquote>\n
\t  (4)  Where a finding of total or partial partition
\n\t       has been\t recorded by  the Income-tax Officer
\n\t       under
\n25<\/span>
\n\t       this section,  and the  partition took  place
\n\t       during the previous year:\n<\/p><\/blockquote>\n
\t       (a)  the total  income of the joint family in
\n\t\t    respect of\tthe period up to the date of
\n\t\t    partition shall  be assessed  as  if  no
\n\t\t    partition had taken place; and\n<\/p><\/blockquote>\n
\t       (b)  each member\t or group  of members shall,
\n\t\t    in addition\t to any\t tax for which he or
\n\t\t    it\tmay   be   separately\tliable\t and
\n\t\t    notwithstanding any\t thing contained  in
\n\t\t    clause (2) of section 10, be jointly and
\n\t\t    severally liable  for  the\ttax  on\t the
\n\t\t    income so assessed.\n<\/p><\/blockquote>\n
\t  (5)  Where a finding of total or partial partition
\n\t       has been\t recorded by  the Income-tax Officer
\n\t       under this  section, and\t the partition\ttook
\n\t       place after  the expiry of the previous year,
\n\t       the total  income of the previous year of the
\n\t       joint family  shall  be\tassessed  as  if  no
\n\t       partition has taken place, and the provisions
\n\t       of clause  (b) of  sub-section (4)  shall, so
\n\t       far as may be, apply to the case.\n<\/p><\/blockquote>\n
\t  (6)  Notwithstanding anything\t contained  in\tthis
\n\t       section if the Income-tax Officer finds after
\n\t       completion  of  the  assessment\tof  a  Hindu
\n\t       undivided family\t that the family has already
\n\t       effected\t a   partition,\t whether   total  or
\n\t       partial, the Income-tax Officer shall proceed
\n\t       to recover  the tax from every person who was
\n\t       a member\t of the family before and partition,
\n\t       and every  such person  shall be\t jointly and
\n\t       severally liable for the tax on the income so
\n\t       assessed.\n<\/p><\/blockquote>\n
\t  (7)  For the purposes of this section, the several
\n\t       liability of  any member\t or group of members
\n\t       thereunder shall be computed according to the
\n\t       portion of the joint family property allotted
\n\t       to him  or it at the partition, whether total
\n\t       or partial.\n<\/p><\/blockquote>\n
\t  (8)  The provisions  of this section shall, so far
\n\t       as may  be, apply in relation to the levy and
\n\t       collection of
\n26<\/span>
\n\t       any penalty,  interest, fine  or other sum in
\n\t       respect of  any period  up to the date of the
\n\t       partition, whether  total or  partial,  of  a
\n\t       Hindu  undivided\t family\t as  they  apply  in
\n\t       relation to the levy and collection of tax in
\n\t       respect of  any such  period. Explanation- In
\n\t       this section-\n<\/p><\/blockquote>\n
\t       (a)  “partition” means-\n<\/p><\/blockquote>\n
\t\t    (i)\t where\tthe   property\tadmit  of  a
\n\t\t\t physical   division,\ta   physical
\n\t\t\t division of  the  property,  but  a
\n\t\t\t physical  division  of\t the  income
\n\t\t\t without a  physical division of the
\n\t\t\t property producing the income shall
\n\t\t\t not be deemed to be a partition; or\n<\/p><\/blockquote>\n
\t\t    (ii) where the  property does not admits
\n\t\t\t of a  physical division  then\tsuch
\n\t\t\t division as the property admits of,
\n\t\t\t but  a\t mere  severance  of  status
\n\t\t\t shall\tnot   be  deemed   to  be  a
\n\t\t\t partition;\n<\/p><\/blockquote>\n
\t       (b)  “partial partition”\t means\ta  partition
\n\t\t    which is  partial as regards the persons
\n\t\t    constituting the Hindu undivided family,
\n\t\t    or the properties belonging to the Hindu
\n\t\t    undivided family, or both.”<\/p><\/blockquote>\n
     Section 4(1)  of the  Act which  levies the  charge  of
\nincome-tax states  that where  any Central  Act enacts\tthat
\nincome-tax shall  be charged  for any assessment year at any
\nrate or\t rates, income-tax at that rate or those rates shall
\nbe charged  for that year in accordance with, and subject to
\nthe provisions of, the Act in respect of the total income of
\nthe previous  year or previous years, as the case may be, of
\nevery person.  The expression ‘person’ is defined in section
\n2(31) of  the Act  as including\t within its  meaning a Hindu
\nundivided family.  In order  to avoid double taxation of the
\nsame income under the Act, any sum received by an individual
\nas a  member of\t a Hindu undivided family where such sum has
\nbeen paid  out of  the income  of the  family is required by
\nsection 10  (2) of  the Act  not to be included in computing
\nthe total  income of  a previous  year of  any person.\tThis
\nrequirement, however,  is subject  to section  64 (2) of the
\nAct with effect from April 1, 1971. Then follows section 171
\nof the Act which
\n27<\/span>
\nprovides for  the assessment  after  partition\tof  a  Hindu
\nundivided family.\n<\/p>\n
     Under Hindu  law  partition  may  be  either  total  or
\npartial. A  partial partition  may be as regards persons who
\nare members  of the  family or\tas regards  properties which
\nbelong to  it. Where  there has\t been  a  partition,  it  is
\npresumed that  it was a total one both as to the parties and
\nproperty but  when there  is a\tpartition between  brothers,
\nthere is  no  presumption  that\t there\thas  been  partition
\nbetween one  of them  and his  descendants. It\tis, however,
\nopen to\t a party  who alleges  that the\t partition has\tbeen
\npartial either\tas to persons or as to property to establish
\nit. The\t decision on  that question depends on proof of what
\nthe parties  intended whether they intended the partition to
\nbe partial either as to persons or as to properties or as to
\nboth. When  there is  partial partition\t as to property, the
\nfamily ceases  to be  undivided\t so  far  as  properties  in
\nrespect\t of   which  such  partition  has  taken  place\t but
\ncontinues to  be undivided  with  regard  to  the  remaining
\nfamily property. After such partial partition, the rights of
\ninheritance  and   alienation  differ\taccordingly  as\t the
\nproperty in question belongs to the members in their divided
\nor undivided capacity. Partition can be brought about (1) by
\na father during his lifetime between himself and his sons by
\ndividing properties  equally amongst  them, (2) by agreement
\nor (3)\tby a suit or arbitration. A declaration of intention
\nof a  coparcener to become divided brings about severance of
\nstatus. As observed by the Privy Council in Appovier v. Rama
\nSubba Aivan”  when the\tmembers of an undivided family agree
\namong themselves  with regard to a particular property, that
\nit shall thenceforth be the subject of ownership, in certain
\ndefined shares, then the character of undivided property and
\njoint enjoyment\t is taken  away from  the subject-matter  so
\nagreed to  be dealt  with, and\tin the\testate\teach  member
\nthenceforth a definite and certain share, which he may claim
\nthe right to receive and to enjoy in severalty, although the
\nproperty itself\t has not been actually severed and divided”.
\nA physical  division of\t the property  which is the subject-
\nmatter of partition is not necessary to complete the process
\nof partition in so far as that item of property is concerned
\nunder Hindu  law. The parties to the partition may enjoy the
\nproperty in  question as  tenants in  common. In Approvier’s
\ncase (supra)  the Privy\t Council further  laid down that “if
\nthere be a conversion of the joint tenancy of an
\n28<\/span>
\nundivided family  into a tenancy in common of the members of
\nthat  undivided\t family,  the  undivided  family  becomes  a
\ndivided family\twith reference\tto the\tproperty that is the
\nsubject of  that agreement,  and that  is  a  separation  in
\ninterest and  in right, although not immediately followed by
\nde facto actual division of the subject-matter. This may, at
\nany time, be claimed by virtue of the separate right.”\n<\/p>\n
     It is  thus clear\tthat Hindu law does not require that
\nthe property  must in every case be partitioned by mates and
\nbounds or  physically into  different portions to complete a
\npartition. Disruption  of status can be brought about by any
\nof the modes referred to above and it is open to the parties
\nto enjoy their share of property as tenants-in-common in any
\nmanner known  to law  according to  their  desire.  But\t the
\nincome-tax law\tintroduces certain  conditions of its own to
\ngive effect to the partition under section 171 of the Act.\n<\/p>\n
     Section 171 of the Act applies to a case where there is
\na Hindu\t undivided family  which had  been assessed  as such
\nunder the  Act until  a claim  is made\tunder section 171(2)
\nthat there  has been a partition-total or partial in it. The
\npartition contemplated\tunder section  171 of the Act may be
\neither total or partial. Here there is a departure made from
\nsection 25A of the 1922 Act which was concerned with a total
\npartition only.\t In sub-sections  (2)  to  (5)\tand  (8)  of
\nsection 171 of the Act, the word ‘partition’ is qualified by
\nwords ‘total  or partial’. The Explanation to section 171 of
\nthe Act\t to which  we shall  revert again  also defines\t the
\nexpression ‘partial  partition’ as meaning a partition which
\nis partial  as regards\tthe persons  constituting the  Hindu
\nundivided family,  or the  properties belonging to the Hindu
\nundivided family,  or both.  Subsection (2)  of section\t 171
\nprovides that  where at\t the time  of making  an  assessment
\nunder section 143 or section 144 of the Act it is claimed by
\nor on  behalf of  any member  of a  Hindu  undivided  family
\nassessed as  undivided that  a partition,  whether total  or
\npartial, has  taken place  among the members of such family,
\nthe Income-tax\tOfficer shall  make an inquiry into the said
\nclaim after  giving notice to all the members of the family.
\nOn the\tcompletion of the inquiry, the Income-tax Officer is
\nrequired by  sub-section (3)  of section  171  to  record  a
\nfinding as  to whether\tthe claim  of  partition,  total  or
\npartial is  true or  not  and  if  there  has  been  such  a
\npartition, the date on which it has taken place. Sub-section
\n(4) of\tsection 171  states that  when a finding of total or
\npartial partition has been
\n29<\/span>
\nrecorded by  the Income-tax  Officer and  the partition\t had
\ntaken place during the previous year the total income of the
\njoint family  in respect  of the  period upto  the  date  of
\npartition shall\t be assessed  as if  no partition  had taken
\nplace and  each member or group of members shall in addition
\nto any\ttax for\t which he or it may be separately liable and
\nnotwithstanding anything  contained in clause (2) of section
\n10 be  jointly and severally liable to the tax on the income
\nso assessed Where the finding recorded is that the partition
\nhad taken  place after\tthe expiry of the previous year then
\nthe joint family has to be assessed under sub-section (5) of
\nsection 171  as if  no partition had taken place and the tax
\nshall be  recoverable mutatis mutandis as provided in clause\n<\/p>\n
(b) of\tsub-section (4)\t thereof. The several liability of a
\nmember or  a  group  of\t the  undivided\t family\t has  to  be
\ndetermined under sub-section (7) of section 171 according to
\nthe share  of family  property allotted\t to him\t or  to\t the
\ngroup, as  the case  may be.  Sub-section (8) of section 171
\nextends the  above rules of assessment and liability to levy
\nand collection\tof any\tpenalty, interest, fine etc. payable
\nby the family upto the date of partition. Sub-section (6) of
\nsection 171  which contains  a non  obstante clause empowers
\nthe Income-tax\tOfficer to recover the tax due from a family
\nfrom every member of the family before the partition even if
\nhe finds  after the completion of assessment that the family
\nhas undergone  a partition  already. The true effect of this
\nprovision is  discussed in  Govinddas &\t Ors. v.  Income-tax
\nOfficer & Anr.\n<\/p>\n
     Now we  come to  sub-section (1)  of section 171 of the
\nAct which  contains a  ‘deeming’ provision.  It says  that a
\nHindu family  hitherto assessed as undivided shall be deemed
\nfor the\t purposes of  the Act  to continue  to\tbe  a  Hindu
\nundivided family  except where and in so far as a finding of
\npartition has  been recorded  in respect of it under section\n<\/p>\n
171. Partition\treferred to  here can  obviously  include  a
\npartial\t partition   also  either  as  regards\tthe  persons
\nconstituting  the   undivided  family\tor  the\t  properties
\nbelonging to it or both, in view of the provisions contained
\nin the\tother sub-sections in and the Explanation to section\n<\/p>\n
171. Where  there is  no claim\tthat  a\t partition-total  or
\npartial had  taken place  made\tor  where  it  is  made\t and
\ndisallowed a  Hindu undivided family which is hitherto being
\nassessed  as   such  will   have  to  be  assessed  as\tsuch
\nnotwithstanding the fact a partition had in fact taken place
\n30<\/span>
\nas per Hindu law. A finding to the effect that partition had
\ntaken place  has to  be recorded  under section\t 171 by\t the
\nIncome-tax Officer. He can record such a finding only if the
\npartition  in  question\t satisfies  the\t definition  of\t the
\nexpression ‘partition’\tfound in Explanation to section 171.
\nA transaction can be recognised as a partition under section
\n171 only  if,  where  the  property  admits  of\t a  physical
\ndivision, a  physical division\tof the\tproperty  has  taken
\nplace. In  such a  case mere physical division of the income
\nwithout a physical division of the property producing income
\ncannot be  treated as  a partition.  Even where the property
\ndoes not  admit of a physical division then such division as
\nthe property admits of should take place to satisfy the test
\nof a partition under section 171. Mere proof of severance of
\nstatus under  Hindu law\t is not\t sufficient to\ttreat such a
\ntransaction as\ta  partition.  If  a  transaction  does\t not
\nsatisfy the above additional conditions it cannot be treated
\nas a  partition under  the Act\teven though  under Hindu law
\nthere has been a partition total or partial. The consequence
\nwill be\t that the  undivided family  will be continued to be
\nassessed as  such by  reason of\t sub-section (1)  of section\n<\/p>\n
171.
\n     At this  stage one\t contention urged  on behalf  of the
\nassessee needs to be considered. It is asserted on behalf of
\nthe assessee that the fiction contained in section 171(1) of
\nthe Act\t does not  at all apply to an undivided family which
\ncontinues to  be in  fact an  undivided family\teven after a
\npartial partition  as regards  some of\tits  properties\t had
\ntaken place.  The argument is that a ‘deeming’ provision can
\noperate only  where the\t real state  of affairs is different
\nfrom what the law deems as existing and it can not where the
\nreal state  of affairs is the same as the one which law by a
\nfiction treats\tas existing.  It is  urged  that  since\t the
\nundivided family  in fact  continues even  after  a  partial
\npartition as  regards property,\t there is no need to enact a
\nrule declaring\tthat it\t shall be  deemed to  continue as an
\nundivided family.  Hence section 171(1) of the Act cannot be
\nconstrued as  being applicable\tto such\t a  case.  In  other
\nwords, it  is  urged  that  where  all\tthe  members  of  an
\nundivided family  continue to  be  members  of\tsuch  family
\nowning the  remaining properties  which are  yielding income
\nafter a\t partial partition  as regards\tsome properties\t has
\ntaken place,  the undivided  family is liable to be assessed
\nas such only in respect of the income derived by it from the
\nremaining items\t of property  owned by\tit  and\t the  income
\nderived properties  which have\tgone out of the ownership of
\nthe family  by reason  of the  partial partition  should  be
\nexcluded from  the total  income of  the family. Reliance is
\nplaced on the following obser-\n<\/p>\n
31<\/span><\/p>\n
vations of the Privy Council in the case of Sir Sunder Singh
\nMajithia (supra)  where sub-section  (3) of  section 25-A of
\nthe 1922 Act arose for consideration:\n<\/p>\n
\t  “The section\thas nothing  to say  about the Hindu
\n     undivided family  which continues\tin  existence  never
\n     having been  disrupted. Such  a case  is  outside\tsub-
\n     section (3)  because it  is not  within the  section at
\n     all. No  sub-section is required to enable an undivided
\n     family which  has never  been broken up to be deemed to
\n     continue. But  it need  not have the same assets or the
\n     same income  in each  year and it can part with an item
\n     of its  property to  its individual members if it takes
\n     the proper steps.”<\/p><\/blockquote>\n
     It is  not necessary  to  make  any  comment  on  these
\nobservations as\t they had  held the field until the Act came
\ninto force  with section  171 inserted in it. The Parliament
\nenacted section\t 171 after taking note of the above decision
\nand several other decisions following it which had taken the
\nview that  a partial partition did not fall within the scope
\nof section  25-A. It  expressly stated in section 171 of the
\nAct that  the said provision was applicable to both kinds of
\npartitions-total or  partial, It  has also  defined  partial
\npartition  as  one  which  is  partial\tas  regards  persons
\nconstituting  the   undivided  family\tor  as\tregards\t the
\nproperties  belonging  to  the\tundivided  family  or  both.
\nVirtually the  present provision  deals with  all  kinds  of
\npartitions the nature of which sometimes may be difficult to
\npredicate correctly.  Take a  joint family  consisting of  a
\nfather, his  sons and  grandsons as  shown in  the following
\ngenealogical tree:\n<\/p>\n
\t\t\t A
\n\t\t\t |
\n\t\t\t |
\n\t\t\t |
\n     ______________________________________________
\n     |\t\t\t |\t\t     |
\n     |\t\t\t |\t\t     |
\n     B\t\t\t C\t\t     D
\n     |\t\t\t |\t\t     |
\n     |\t\t\t |\t\t     |
\n  ______________      ___________\t ___________
\n |\t       |      |\t\t|\t |\t    |
\n |\t       |      |\t\t|\t |\t    |
\n E\t       F      G\t\tH\t I\t    J
\n     When a  partition takes place in the above family there
\nmay be\ta partition when all of them-A, B, C, D, E, F, G, H,
\nI and J
\n32<\/span>
\nbecome divided each of them taking his rightful share in the
\nfamily property.  In this  case there  is a total partition.\n<\/p><\/blockquote>\n
The second kind of partition may be amongst four groups, the
\nfirst consisting  of A\tonly, the  second consisting of B, E
\nand F,\tthe third  consisting of  C, G\tand H and the fourth
\nconsisting of  D, I and J each group taking one fourth share
\nin all\tthe properties and the branch of B, the branch of C,
\nand the\t branch of  D continuing  as undivided families. The
\nthird kind  of partition may be a partition where any one of
\nthe three  branches the\t branch of B, or the branch of C, or
\nthe branch of D separates from the rest of the family taking
\nits share  thus resulting  in  two  undivided  families\t one
\nfamily which  has gone\tout of\tthe  family  and  the  other
\nconsisting of  the remaining  members. In  these  cases\t the
\npartition can  be called partial both as regards persons and
\nas regards properties. The next kind of partition may be one
\nwhere all the members divide amongst themselves only some of
\nthe  family   properties  and  continue\t as  members  of  an
\nundivided family  owning the  remaining\t family\t properties.
\nThis is called a partial partition as regards property. Even
\nhere the division of the property which is subject matter of
\npartial partition  may be  groupwise also.  In the case of a
\npartial partition  as regards property, one thing noticeable
\nis that\t after such  partition, the  property which  is\t the
\nsubject matter\tof partition  is held  by the members of the
\nfamily as  tenants-in-common and  the  rest  of\t the  family
\nproperties continue  to be  held by  them as  members of the
\nundivided family.  This\t is  the  very\tprinciple  which  is
\nexpounded by the Privy Council in Appovier’s case (supra) in
\nthe two passages extracted above.\n<\/p>\n
     After a  partial partition\t as  regards  property,\t the
\nproperty divided  is held  by the  members of  the undivided
\nfamily as  divided members  with all  the incidents  flowing
\ntherefrom and  the property  not so divided as members of an
\nundivided family.  The fiction\tenacted in section 171(1) of
\nthe Act,  therefore, operate in such a case also because the
\nfamily which  has become  divided as  regards  the  property
\nwhich is  the subject-matter  of partial partition is deemed
\nto continue  as the owner of that property and the recipient
\nof the\tincome derived from it except where and in so far as
\na finding  of partition has been given under section 171. In
\nsuch a\tcase it\t is obvious  the real state of affairs is in
\nfact different\tfrom what  is created  by the fiction and it
\ncannot be  said that there is no occasion for the fiction to
\noperate. That  is the true meaning of section 171 (1) of the
\nAct. In view of the substantial changes that are brought
\n33<\/span>
\nabout in  section 171,\twe find\t it impossible to accept the
\ncontention that\t the fiction  in section  171 (1) of the Act
\ndoes not  operate in  the  case\t of  partial  partitions  as
\nregards property  where the  composition of  the family\t has
\nremained unchanged.\n<\/p>\n
     The answer\t to the\t first question referred to the High
\nCourt by  the Tribunal depends upon the true construction of
\nsub-clause (i)\tof clause  (a) of the Explanation to section
\n171 of\tthe Act.  The subject matter of partial partition as
\nmentioned earlier,  consisted of eighteen items of immovable
\nproperty. The  value of each of them is given in the earlier
\npart of\t this  judgment.  Under\t the  partial  partition  in
\nquestion, six  persons were  allotted 1\/12th  share each  in
\nthese eighteen\tproperties and\tfour persons  were  allotted
\n1\/8th share each. The total value of the eighteen properties
\nwas Rs.\t 7,26,120.  Six\t of  the  members  were,  therefore,
\nentitled to properties of the value of Rs. 60,510\/- each and
\nfour of them were entitled to properties of the value of Rs.
\n90,765 each.  Before the  Tribunal two submissions were made
\non behalf  of the  assessee in\tsupport of the plea that the
\narrangement entered  into amongst  the parties providing for
\ndivision of the income of the properties in question without
\nresorting to  physical division\t of  the  properties  was  a
\npartition as  defined by  the Explanation  to section 171 of
\nthe Act.  The first  submission was that the word ‘property’
\noccurring in  clause (a)  (i) of  the Explanation to section
\n171 referred  to an  individual item  of property  which  is
\ndivided and  not to  all the properties which are divided at
\nthe partition-total  or partial-and  hence as  it  had\tbeen
\naccepted by  the Department  that each of the eighteen items
\nof property  could not\tbe  divided  conveniently  into\t ten
\nportion without\t destroying its\t utility it  had to  be held
\nthat the  properties did not admit of physical division. The
\nsecond submission  which was  urged in\tthe alternative\t was
\nthat  even  if\tit  was\t possible  to  distribute  the\tsaid
\nproperties equitably  amongst the  shares by  asking them to
\nmake necessary monetary adjustment to equalise the shares as
\nthe Explanation\t to section 171 did not contemplate any such
\nmonetary adjustment,  the assessee could not be denied under
\nsection 171  the recognition  of the partial partition which
\nhad taken  place as  per Hindu\tlaw. In support of this plea
\nthe assessee  depended upon  the opinion  of the  arbitrator
\nTandon, on  the basis  of whose\t award the  decree had\tbeen
\npassed and  also the  evidence of  Lakshman Swaroop tendered
\nbefore the  Appellate Assistant\t Commissioner.\tTaking\tinto
\nconsideration all the material before them and having regard
\nto the\tshares allotted\t to each  of the members, the market
\nvalue, situation, size and the age
\n34<\/span>
\nof each\t of the\t items of  the property in question, the tax
\npayable in respect of each of them and also the fact whether
\nan item of property is in the occupation of a tenant or not,
\nthe Tribunal  came to the conclusion that it was possible to
\ndivide the  properties in question physically into different
\nlots so\t that each  member could  take his rightful share in
\nthem. The High Court also has expressed the same opinion.\n<\/p>\n
     On the  facts and\tin the circumstances of the case, we
\napprove of  the above  view of\tthe High Court. We feel that
\nthe properties\tinvolved in  this case\tadmitted of physical
\ndivision  into\tthe  required  number  of  shares  and\tsuch
\ndivision would not have adversely affected their utility. It
\nis common  knowledge that in every partition under Hindu law
\nunless the  parties agree to enjoy the properties as tenants
\nin-common, the need for division of the family properties by
\nmetes  and  bounds  arises  and\t in  that  process  physical
\ndivision of  several items  of property\t which admit of such
\nphysical division  does take  place. It\t is not necessary to
\ndivide each item into the number of shares to be allotted at
\na partition.  If a  large number  of items  of property\t are
\nthere, they  are usually  apportioned on  an equitable basis
\nhaving regard  to all  relevant factors\t and if necessary by
\nasking the parties to make payments of money to equalise the
\nshares. Such  apportionment  is\t also  a  kind\tof  physical
\ndivision of  the properties  contemplated in the Explanation
\nto section 171. Any other view will be one divorced from the
\nrealities of life. The case before us is not a case where it
\nwas impossible to make such a division. Nor is it shown that
\nthe members were not capable of making payment of any amount
\nfor equalisation of shares. We are of the view that there is
\nno material  in the  case showing  that\t the  assessee\tever
\nseriously attempted  to make  a\t physical  division  of\t the
\nproperty as  required by  law. All that was attempted was to
\nrely upon  the arbitrator’s  award  and\t Lakshman  Swaroop’s
\nevidence which\twere rightly  held to be insufficient by the
\nTribunal to  uphold the\t claim of the assessee. The assessee
\ncannot derive any assistance from the decision of this Court
\nin Charandas  Haridas Anr.  v. Commissioner  of\t Income-tax,
\nBombay North.  Kutch and  Saurarhtra,  Ahmedabad,  and\tAnr.
\nThere the<\/a>  item of asset which had to be partitioned was the
\nright in  certain  managing  agency  agreements.  The  Court
\nupheld the arrangement of division of commission amongst the
\nmembers among whom the said right was divided as a partition
\nsatisfying the\ttest laid  down by  the income-tax law as it
\nwas of\tthe view  that any  physical division  of that right
\nmeant the dissolution of
\n35<\/span>
\nthe managing agency firms and their reconstitution which was
\nnot altogether\tin the hands of the karta of the family. The
\nCourt also  was satisfied  that the  family took the fullest
\nmeasure\t possible  for\tdividing  the  joint  interest\tinto
\nseparate interests.  In the  present case  we are  satisfied
\nthat no such attempt to divide the properties was made. This
\ncase clearly falls under sub-clause (i) of clause (a) of the
\nExplanation to\tsection 171  of the Act but does not satisfy
\nthe requirement\t of that  sub-clause as no physical division
\nof the\tproperties  was\t made  even  though  they  could  be
\nconveniently so\t divided. Sub-clause  (ii) thereof  does not
\napply to  this case  at all.  We, therefore,  agree with the
\nanswer given  by the High Court to the first question in the
\naffirmative. The  appeal  of  the  assessee  is,  therefore,
\nliable to be dismissed.\n<\/p>\n
     Having held that the assessee was not entitled to claim
\na partial  partition had  taken place under section 171, the
\nHigh Court  fell into an error in holding that the income of
\nthe properties\twhich were  the subject\t matter\t of  partial
\npartition could\t not be\t included in the total income of the
\nassessee by  relying  upon  the\t decisions  which  had\tbeen
\nrendered on  the basis of section 25-A of the 1922 Act which
\nhad been  construed  as\t not  being  applicable\t to  partial
\npartitions. We have already held that section 171 of the Act
\napplies to  all partitions-total and partial-and that unless
\na finding  is recorded\tunder section  171  that  a  partial
\npartition has  taken place  the income\tfrom the  properties
\nshould be  included in\tthe total  income of  the family  by
\nvirtue of  sub-section (1) of section 171 of the Act. To put
\nit in  other words  what would\thave been  the position of a
\nHindu undivided\t family which  had claimed  in an assessment
\nproceedings under  the 1922  Act that  a total partition had
\ntaken place  and had  failed to\t secure a  finding  to\tthat
\neffect in its favour under section 25-A thereof would be the
\nposition of  a Hindu  undivided family\twhich has  failed to
\nsubstantiate  its  plea\t of  partial  partition\t as  regards
\nproperty under section 171 of the Act. The property which is
\nthe subject-matter of partial partition would continue to be
\ntreated as  belonging to  the family  and its  income  would
\ncontinue to  be included  in its  total income\tuntil such a
\nfinding is  recorded. That is the true effect of section 171
\n(1). It\t was, however,\turged on  the analogy  of the income
\nfrom a\tfamily property\t alienated by a karta in favour of a
\nstranger that  the income which was not actually received by
\nthe family could not be taxed and in support of
\n36<\/span>
\nthis plea  reliance was\t placed on  a decision of the Madras
\nHigh Court  in A.  Kannan Chetty  v. Commissioner of Income-
\ntax, Madras In that decision it is observed thus:\n<\/p>\n
\t  “For instance, if the karta of a family effects an
\n     alienation or  even makes\ta gift.\t in so\tfar  as\t the
\n     taxing department\tis concerned it is the income of the
\n     members of\t the Hindu  undivided  family  that  can  be
\n     assessed, and if by reason of an alienation, whether it
\n     is binding upon the members of the joint family or not,
\n     an item  of property  ceases to  be in the hands of the
\n     joint family, it would not be open to the department to
\n     say  that\t they  would   ignore  such  an\t alienation,
\n     notwithstanding that  the possession  of the properties
\n     and its  income may  pass into the hands of a stranger.
\n     It may  be different  in cases  where the\tjoint family
\n     deals with one or more items of property or converts it
\n     into a  different estate  retaining both possession and
\n     income in\tits own\t hands. That  may properly be a case
\n     where the department may ignore such a transaction.”<\/p><\/blockquote>\n
     It is  significant that  in the passage extracted above
\nthe Madras  High Court\thas distinguished  the\tcase  of  an
\nalienation in  favour of  a stranger from the case where the
\njoint family  deals with  one or  more items  of property or
\nconverts  it   into  a\t different  estate   retaining\tboth
\npossession and\tincome in  its own hands. We do not consider
\nthat such  a plea  is available\t to the assessee because the
\nacceptance of such a plea would lead to the nullification of
\nthe scheme  of section\t171 of\tthe Act itself. As long as a
\nfinding is  not recorded  under section\t 171 holding  that a
\npartial partition had taken place the Hindu undivided family
\nshould be deemed for the purposes of the Act to be the owner
\nof the property which is the subject matter of partition and
\nalso the  recipient of\tthe income  from such  property. The
\nassessment should  be made  as such and the tax assessed can
\nbe recovered  as provided  in the Act. In the circumstances,
\nthe decision of the High Court on the second question has to
\nbe reversed.  We accordingly record our answer to the second
\nquestion in the affirmative and in favour of the Department.\n<\/p>\n
37<\/span><\/p>\n
     In the  result,  Civil  Appeal  No.  1370\tof  1974  is
\ndismissed and  Civil Appeal No. 1768 of 1975 is allowed. The
\nassessee shall\tpay the costs of the Department. Hearing fee
\none set.\n<\/p>\n
N.V.K.\t\t\t\t      Civil Appeal 1370\/1974\n\t\t\t\t\t dismissed and Civil\n\t\t\t\t   Appeal 1768\/1975 allowed.\n38<\/span>\n\n\n\n<\/pre>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Kalloomal Tapeswari Prasad … vs The C. I. T., Kanpur(And Vice … on 12 January, 1982 Equivalent citations: 1982 AIR 760, 1982 SCR (3) 9 Author: E Venkataramiah Bench: Venkataramiah, E.S. (J) PETITIONER: KALLOOMAL TAPESWARI PRASAD (HUF), KANPUR Vs. RESPONDENT: THE C. I. T., KANPUR(AND VICE VERSA) DATE OF JUDGMENT12\/01\/1982 BENCH: […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-30146","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nKalloomal Tapeswari Prasad ... vs The C. I. 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