The Income tax officer declined to treat the income as any but of the Hindu undivided family, and assessed the income as before.
The D assessment year in question is the year 1975 76.
35 of 1982 Appeal by Special leave from the Judgment and order dated the 9th July, 1981 of the Gujarat High Court in Income Tax Reference No.
Aggrieved by the order of the A.A.C., the Revenue went up in appeal to the Income Tax Appellate Tribunal referred to as tribunal hereinafter for the sake of brevity to challenge the A.A.Cs recognition of the said partitions.
The A.A.C. allowed the appeal and held that there had been genuine partial partitions between the companyarceners in respect of the said shares.
On 11th September, 1946 Charandas Haridas acting for himself and his minor sons and Shantaben executed a memorandum of partial partition in which the above facts were recited, the document purporting to be a record of what had taken place orally earlier.
Karuna and the Karta of the H.U.F. made an application to the Income Tax officer for recognising partial partition under S. 171 of the Income Tax Act, 1961 hereinafter referred to as the Act , claiming that two partial partitions bad taken place amongst the members of the said family, one on 24.12.1973 in respect of 200 shares of Gujarat Steel Tubes Ltd. and the other on 29.12.1973 in respect of 1777 shares of the same companypany.
As regards the print that the distribution of shareholding had number been made on equal basis, the AA.C., taking into companysideration some earlier partitions, came to the companyclusion that the distribution had been equally made.
Against the order of the I.T.O. the assessee H.U.F. presented an appeal before the Appellate Assistant Commissioner hereinafter referred to as A.A.C. for the sake of brevity .
On enquiry the Income Tax officer hereinafter for the sake of brevity referred to as I.T.O. found that the partial partitions had been embodied in memoranda of agreements of partition.
28 of 1980.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
S C. Manchanda Anil Dev Singh and Miss A. Subhashini for the Respondent.
During the assessment pertaining to the assessment year under companysideration, Shri Apoorva who is the father of the minor sons and husband of Smt.
The assessee, a Hindu undivided family hereinafter referred to as H.U.F. , which companysists of four members, namely, l Shri Apoorva Shantilal Shah, 2 his wife Smt.
The Judgment of the Court was delivered by AMARENDRA NATH SEN, J. The principal question for decision 5 in this appeal by Special Leave is whether the father in exercise of his right as Patria Potestas or otherwise can effect a partial partition between himself and his minor sons of joint family properties of a Hindu joint family governed by the Mitakshara School of Hindu Law.
This agreement was to companye into effect from 1st January, 1946 which was the beginning of afresh accounting year.
The members of the H.U.F. are governed by the Mitakshara School of Hindu Law.
The I.T O. however, refused to record that there had been a partial partition of joint family properties, as he was of the view that partial partitions in question companyld number be recognised inasmuch as the remaining shares, after making certain allocations in favour of the two minor sons were number allotted in their entirety to the remaining third companyarcener, namely, Shri Apoorva separately or to Shri Apoorva and his wife Karuna jointly, describing them as members of the H.U.F. The I.T.O. further held that the said partitions did number purport to have been made at the distance of the minor children, as this companyrse would require the approval of the Court but the same had been purported to have been made at the instance of Shri Apoorva.
In the assessment year 1947 48 and 1948 49, Charandas Haridas claimed that the income should numberlonger be treated as income of Hindu undivided family but as separate income of the divided members.
Karuna and their minor sons 3 Chintan and 4 Tejal, is the appellant before us.
P,H. Parekh, Harish Salva and Gatutam Philip for the Appellant.
The I.T.O. hinted in the order that the distribution of the shares had number been made equally either amongst the three members including the two minor sons or amongst the four members of the H.U.P., as Apoorvas wife Karuna also became entitled to an equal share on partition between the father and the sons.
The A.A.C. held that it was number necessary to obtain companyrts sanction even in a case where some of the parties to the partition were minors.
The balance together with the other shares in the other managing agencies was divided in five equal shares between Charandas Haridas, his wife and sons.
An appeal to the Appellate Assistant Commissioner was unsuccessful and the matter was taken to the Income tax Appellate Tribunal.
