9911796707
TMI Blog1976 (9) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... uding the three estates and assessed the seven share-holders who are members of the H.U.F. to the extent of 1/7th share in the estate in their individual status, along with other movable properties belonging to the individual members. 3. The Wealth-tax Officer, while assessing the individual members of the family had valued the three estates together and from that had deducted the exemption under section 5(1)(iva) amounting to Rs. 1,50,000 and added them to the value of the building, machinery and movable assets and had totalled the wealth of the three estates, deducted the liabilities and the net wealth was divided into seven shares one share being assessed in the hands of each of the members of the family, In separate appeals before the Appellate Asstt. Commissioner, the individual share holders had contended that the deduction under s.5(1)(iva) should have been given in the hands of each share-holder separately. While disposing of the appeals, the learned Appellate Asstt. Commissioner embarked on the question a to whether the lands belonged to the appellants i.e the individual members of the family or to some body else because, in his opinion, it was important to find this out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner on 29th May, 1975, the Commissioner of Wealth tax issued a notice dt. 21st Jan., 1976 to the assessee-HUF proposing to include in the assessment of the Assessee-HUF the value of the three estates which, according to him, still belonged to the HUF in the three assessment years in appeal before us. The contention of the learned counsel for the assessee before the Commissioner was that the capital of the estate in question was divided amongst the members of the family in a partial partition orally agreed to on 31st March, 1970, that all the tenants-in-common had appointed Sri M.L. Ram Chadra Setty to manage the administration of the estates and that as a result of partial partition, the properties came to be held as tenants-in-common. The registered partition deed dated 30th March, 1973 had been drawn up by way of abundant caution and did not nullify the declaration made earlier. By the earlier declaration, only a partial partition was effected and, therefore, s.20 of the Wealth-tax Act was not applicable and, therefore, no support can be drawn from s.171 of the Income-tax Act which also applies to partial partition. It was urged relying on the Allahabad High Court decision in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Similarly, the ruling relied on by Appellate Assistant Commr. In his orders of Mysore High Court in the case of K.Y. Pillaih & Sons(1) also pertained to a claim of complete partition of properties and disruption of the family under s.25(A) of the Indian Income-tax Act, 1922. These rulings have no direct bearing on the facts of this case. However, the second question referred in the Mysore High Court ruling was whether for purposes of s.25A(1) a partition of the entire joint family property is necessary and in this regard, the learned Judges observed on Page 150 that so long as there is some property which is held in common by members of a Hindu Family, that family cannot be said to be divided for the purpose of s.25A. So far as some property continues undivided several members who hold that property in common do constitute an undivided family so far as that item of property is concerned. "In regard to property already divided and allotted to the exclusive enjoyment of several members, that property will cease to be one of the assets of the joint family, but the family does not cease to be a joint family until all items of property owned by the family in jointness is divided in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ortion or by metes and bounds is fully irrelevant. If it is divided by metes and bounds, every member will be assessed as an individual on his income from the portion specifically allotted to him. Otherwise, he will be assessed on the share in the income jointly derived from that property. It was, further held that the requirement of partition in definite portion arises only under s.25A but if the section is not applicable, there is no occasion for considering whether the partial partition is in definite portions or not. Just as the Hindu Law does not require partition to be in definite portions, so also it does not require partial partition to be in definite portions. The Income-tax Act does not at all effect or alter the rules of Hindu Law and they are to be given effect to in every case. If what is valid under the Hindu law is not regarded as valid, or is not recognised for Income-tax purposes, there must be a specific provision to that effect in the Income-tax Act. If the legislature had decided that partial partition not followed by division in definite portions also must not be recognised and that the property partially partitioned should still be treated as joint family prop ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
