9911796707
TMI Blog1973 (2) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... Iyer Merah Estate has been given to the karta's two minor sons, Meyyappan and Muthappan, aged five and three years, respectively, in addition to the transfer of cash of Rs. 1,31,001 to both of them. It was also claimed that in the same partition $ 60,000 was given to each of the three minor daughters of the karta. In support of its case that there was a complete partition of the joint family properties on April 13, 1956, the assessee relied on the relevant entries made in its account books, and also on an affidavit of the karta dated 7th January, 1958, attested by the Commissioner of Oaths, Malaya. The Income-tax Officer made the requisite enquiry under section 25A and found that except the entries in the account books of the assessee and the affidavit above referred to, there was no other evidence to support the alleged partition. Taking into account the fact that the assets of Iyer Merah Estate and the cash transferred to the minor sons had continued to be under the control and management of the karta, even subsequent to the alleged partition, he took the view that the partition set up by the assessee cannot be true. In that view, be rejected the assessee's claim for recognition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied either in including the income from the Iyer Merah Estate in the total income of the family or in rejectiong the assessee's claim for interest on the amounts transferred to the minor children. Aggrieved against this order of the Appellate Assistant Commissioner, the revenue went before the Tribunal, contending that the Appellate Assistant Commissioner was not justified in excluding the income from Iyer Merah Estate and allowing deduction for the interest paid on the amounts transferred to the minor children and that, in fact, there was no relevant and acceptable material to prove that the partition alleged was true and genuine. The Appellate Tribunal considered the materials on record and came to the conclusion that the alleged partition set up by, the assessee was not true and genuine and that the same is only sham and nominal. The Tribunal, however, did not separately and specifically consider the question with regard to the allowance by the assessee towards the interest paid on the amount transferred to the minor daughters. The Tribunal presumably felt that the transfer of funds to the minor daughters took place by way of family partition as set up by the assessee and that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wever, disputes the fact that the estate in question was always treated as business and that the income therefrom was treated as a business income. It is not necessary for us to go into that controversy as to whether the income from the estate in question was a business income or not. Even assuming that the principle laid down in the above decisions is held to be applicable to the facts of this case, still the further question to be considered is whether the entries made in the accounts were real and were actually acted upon. As pointed out by the Tribunal, and it is not disputed by the assessee, there are no other documents to evidence the alleged partial partition except the entries in the account books. The entries in the account books only show the transfer of certain amounts in the name of the karta's minor daughters and the transfer of the said rubber estate and certain other amounts in the name of the karta's minor sons. While considering the truth and probability of the partial partition set up by the assessee, the Tribunal had expressed that the assessee has not been able to explain the need for bringing about the partial partition, especially when no one interested in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e treated as a partial partition. A transaction which is found to be not true cannot be true in part. The assessee has not set up the plea before the Appellate Assistant Commissioner and before the Tribunal that the transaction that took place on April 13,1956, is a partial partition. As pointed out already, the assessee has withdrawn the appeal filed by it against the order refusing to recognise the partition under section 25A on the ground that it is not true. That finding given in the said proceedings will hold good even for part of the transaction. Taking all these circumstances into consideration, the Tribunal held that the plea of partition, either complete or partial, cannot be true and, therefore, cannot be accepted. Even though one of the reasons given by the Tribunal that there is no motive or need for bringing about the alleged partition may not be acceptable to us, still the finding rendered by the Tribunal that the alleged partial partition is not true and genuine but it is only a sham and nominal transaction, cannot be said to be without any material. As regards the amounts transferred to the three minor daughters of the karta of the assessee it cannot, however, be s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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