KIRTIDEV CHINUBHAI Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) The questions that stand referred to us for our consideration at the instance of the assessee (HUF) run as follows: 1 Whether on the facts and in the circumstances of the case the Appellate Tribunal was right in holding that the income from the properties allotted to Shri Kirtidev Chinubhai and his wife Smt. Meera Kirtidev Chinubhai being the two members of the assessee family by the document dated 30th December 1970 is includible in the total income of the assessee? 2 Whether the Appellate Tribunal erred in not applying the ratio of the decision of the Supreme Court in the case of Pushpa Devi vs. CIT (1977) 109 ITR 730 to the facts of the case ? 3 Whether on the facts and in the circumstances of the case the Tribunal was right in holding that there could be no partition on the ground that the assessee HUF consists of the two members only viz. Shri Kirtidev Chinubhai and his wife. Smt. Meera Kirtidev Chinubhai and no other coparcener ?

(2.) Of the there questions learned counsel for the assessee (HUF) taking note of the law speaking on the subject and against the assessee does not press Question No.3. Hence as regards question No.3. the reference is disposed of as not pressed.

(3.) With regard to the other two questions the factual background has got to be broadly delienated. The assessment year is 1972-73. The assessee (HUF) would submit that as per the registered document dated 30th December 1970 made between Kirtdev Chinubhai and his wife Smt. Meera Kirtidev Chinubhai and purporting to be a deed of partial partition the land at M.R. Colony Ahmedabad and 230 shares of Godhra Electricity Company Ltd. belonging to the HUF of Kirtidev Chinubhai were partitioned between him and his wife Smt. Meera Kirtidev Chinubhai; and on such partition Shri Kirtidev Chinubhai was allotted an extent of 6925 Sq. Yds. and the 230 shares of Godhra Electricity Company Ltd.; and his wife Smt. Meera Kirtidev Chinubhai was allotted the rest of the extent of 7780 Sq. Yds. There was also payment of amounts by Smt. Meera Kirtidev Chinubhai to Shri Kritidev Chinubhai to equalise the shares. The assessee (HUF) would contend that the income derived from the shares which were partitioned as aforesaid should not be included in the assessment of the HUF and that such income was includible in the individual assessments of Shri Kirtidev Chinubhai or as the case may be of his wife. The Income Tax Officer rejected the above contentions and included in the total income of the HUF the income derived from the properties which were the subject matter of the deed of partial partition. The assessee preferred an appeal to the Appellate Assistant Commissioner and the Appellate Assistant Commissioner upheld the decision of the Income Tax Officer holding that there could be no partition of a HUF consisting only of a husband and his wife and of no other coparcener. The assessee (HUE;) went further to the Income Tax Appellate Tribunal and the Tribunal confirmed the order of the Appellate Assistant Commissioner. It was contended for the first time before the Tribunal that even eschewing the theory of partition the deed of partition should be construed as a deed of gift and so construed the income from the petitioned properties should be assessed in the hands of the husband and the wife as per the dead on the same analogy. For this purpose reliance was placed on the pronouncement of the supreme Court in Pushpa Devi vs. Commissioner of Income-Tax. New Delhi (1977) 109 ITR Page 730. The Tribunal did not render any positive finding as to whether the deed could be construed as a deed of gift or not and on the other hand the Tribunal declined to permit the assessee to raise his case on the ground that it would be a new case. How the question was approached by the Tribunal would stand better appreciated if the relevant passage in its order stands extracted as follows: