TMI Blog1984 (5) TMI 147X X X X Extracts X X X X X X X X Extracts X X X X ..... e accepted and the capitals gains should be assessed in the hands of members of HUFs equally. These HUFs were never assessed for income tax prior to the assessments made in question. The appellants case is that the partial partition could not be registered due to the government's restrictions and, therefore, should have been taxed the only share income as returned and not the whole income of the family should have been taxed in the appellants' hands. 3. Facts pertaining to these appeals are that the assessee have sold the non-agricultural land situated at Kangnoor at Plot No. 146 for Rs. 44,800 by each of the assessees to Lal bahadur Shashtri Sah. Graha Nirmans Sanstha Maryadit on 8th August, 1975. Kartas of these HUFs had filed their ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Fs. 5. The assessee have filed the memorandum of partial partition of the non-agricultural lands reduced into writing in marathi. A true translation of the said memo of partial partition into English is also filed and it is Annexure 1A of paper book. All the coparceners in the above HUFs are parties to the sale deeds executed by the coparceners of HUFs. If this memorandum of partial partition is read as a whole the only meaning which can be construed is that the coparcener of the HUFs had a real intention to partition the lands in question but they could not do so because of the prohibition in accordance with the provisions of Bombay Prevention of Fragmentation and Consolidation of Holdings Act, 1947 has prevented the assessee to create s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the memorandum of partial partition to distribute amongst themselves the sale proceeds in equal shares. 7. In the light of the above discussed facts the view taken by the ITO that no partition took place because of not registering the partial partition is erroneous when the partial partition could not have been effected and the registration of such partial partition could not have been registered by the registering authority. If the partial partition was not to be registered due to the prohibition then it cannot be said that the actual partition has not taken place because of not registering the partial partition. The memorandum of partial partition has been entered into and executed much earlier then the sales of the lands in questi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther held that as this so called partition deed has not been registered and, therefore, they do not become effective. He has also considered that even in the transfer deeds of sale of lands the appellants have shown the owners of the lands. With that view the AAC has held that the ITO has rightly taxed the capital gains in the hands of the appellants. 9. We have gone through the orders of the authorities below. We have also taken into account that the protective assessments have been made by the ITO regarding the capital gains in the hands of individual coparceners also. That means the ITO was doubtful by not recognising the partial partition of land in question that the HUFs may not be assessed for capital gains. The learned representat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in law which go to establish in circumstances which either amounts to a status or gives rise to a status in relation to rights and obligations are legal facts. Sometimes several inference do, as their combined effects create a legal fact. Declaration of intention to separate with ascertainment of shares by the members of an coparcenary creates disruption of a Hindu joint family. Here, the fact of declaration is physical fact, so is the ascertainment of shares to be held in separate tenancy in pursuance of that declaration. But disruption of the joint family which creates severance of the joint status into individuals is the legal fact. The Orissa High Court has held that where the Court pronounces a finding of legal fact, it is more often ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property was assessable as assessee's individual income. He has pointed out certain observations from pp. 781 and 782. Those observations are distinguishable from the facts of the instant appeals. There is a clear intention of partition and/to effect actual partition because of the prohibition by virtue of law and, therefore, under such a circumstance it was impossible to register the partial partition, such was not a case before the Supreme Court. 12. In our opinion, the coparceners of the HUFs had clear intention to partition the lands in question but they did not do so because of the prohibition of law. Therefore, it was not possible for them to register the partial partition. The view taken by the authorities below not to accept the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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