TMI Blog1970 (12) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... s a Hindu undivided family. The assessment year is 1962-63. There was a registered firm by the name Mesrs. Brij Mohan Lal Rameshwar Lal. Up to the assessment year 1961-62, the firm had two partners, Rameshwar Lal and Kundanlal. The two partners respectively represented their Hindu undivided families. On or about the 2nd of February, 1961, Kundanlal died. On February 3, 1961, the firm was reconstituted. Partners of the reconstituted firm were Rameshwar Lal as the karta of his Hindu undivided family, Kundanlal's widow, Smt. Bharbati Devi, and her adopted son Prem Chand. Rameshwvar Lal's minor son, Ghanshyam, was admitted to the benefits of the partnership. A fresh partnership deed was drawn up on February 22, 1961. In that partnership deed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeals were allowed by the Appellate Tribunal, Allahabad. The Tribunal set aside the orders of the Appellate Assistant Commissioner, and restored the decisions of the Income-tax Officer. At the instance of the assessee, the Tribunal has referred the following questions of law to this court : "(1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that there was no partial partition as claimed by the assessee ? (2) Whether the share of profit paid to Ghanshyam and the interest paid to Rameshwar Lal and Saraswati Devi by the firm M/s. Brij Mohan Lal Rameshwar Lal was rightly included in the income of the assessee, Hindu undivided family ?" Mr. Brijlal Gupta appearing for the department urged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transaction of partial partition was not genuine. In paragraph 2 of the judgment the Tribunal observed that a fresh partnership deed appears to have been executed on March 22, 1961. It appears that, according to the Tribunal, both the partition and the partnership were genuine transactions. Consequently, the sole question for our consideration is whether the attempted partial partition was effective or not. Towards the end of the main judgment dated April 21, 1964, the Tribunal observed: "As in this case there was no complete division of the joint family business or share of the joint family firm in the said business, the Appellate Assistant Commissioner was not right in holding that there was a partial partition with effect from Februa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s partial partition and such partial partition is permissible in law, the Tribunal was bound to recognise it. Question No. 1 has, therefore, to be answered in favour of the assessee. Question No. 2 is consequential. The Income-tax Officer decided to add the profit earned by Ghanshyam and the interest paid to Rameshwar Lal and Saraswati Devi on the short ground that there was no partial partition. On the finding that the partial partition was effective, the profit earned by Ghanshyam and the interest received by Rameshwar Lal and Saraswati Devi cannot be treated as income of the assessee family. The result is that question No. 2 has also to be answered in favour of the assessee. We answer both the questions referred to the court in the n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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