TMI Blog1973 (2) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the following question has been referred : " Whether, on the facts and in the circumstances of the case, there was any material to hold that the partial partition was not true and whether the inclusion of the income of the Iyer Merah Estate and the disallowance of the interest paid to the daughters of the assessee as karta are justified in law ?" The assessee is a Hindu undivided family represented by its karta, Sri M. Chockalingam Chettiar. During the assessment proceedings for the year 1957-58, the assessee claimed that there was a complete partition of the family assets on 13th April, 1956, and, therefore, sought recognition of that partition by filing an application under section 25A of the Act. It was the assessee's case that under the said partition the rubber estate called 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 propert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which the particulars of the partition had been stated and also on the fact that separate accounts had been opened in the names of the minor children. It also relied upon the declaration made by the karta before the Commissioner of Oaths, Malaya, to the effect that he and his minor sons had become divided on and from April 13, 1956, and also a statement made by Srimathi Sigappi Achi, the mother of the minor children, to the effect that she has been acting as the guardian of the minor children subsequent to the partition. The Appellate Assistant Commissioner, however, without going into the question of the truth of total or partial partition pleaded by the assessee, but relying on the decision in Meyyappa Chettiar.v Commissioner of Income-tax, held that the Income-tax Officer was not justified 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 inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bhimraj Bansidhar v. Commissioner of Income-tax, which laid down that the only method by which a business can be divided as a going concern is by dividing the book balances in the names of persons to whom the shares of the business have been allotted and that a partition of the business can, therefore, be brought about by mere specification of the shares in the accounts and making entries therein to show that the business is, thereafter, held in severalty or in specified shares. The learned counsel for the assessee says that though the subject-matter of allotment in this case is a rubber estate, it has always been treated by the income-tax authorities as a business and, therefore, the principle enunciated in the above decisions will apply to this case. The learned counsel for the revenue, however, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wed that the assessee's case was that there has been a complete partition of all the assets of the joint family between coparceners. The karta, in fact, filed an application under section 25A for recognition of that complete partition. On enquiry, the Income-tax Officer specifically found against the truth and genuineness of that partition. It is not as if the Income-tax Officer rejected the application under section 25A on the ground that there was only a partial partition and not at complete partition, and, as such, an application for recognition of the partition cannot be maintained. He held against the truth of the partition as such. It is only when the assessee failed to get recognition of the alleged complete partition, he has come forward with a case that the same transaction should be 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 recognis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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