P C BHANSALI Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) THESE two tax case revisions relate to the assessment years 1977-78 and 1978-79. The assessee, P. C. Bhansali, is the karta and the manager of the Hindu undivided family, consisting of himself, his wife, Kusumben P. Bhansali, and his sons, (1) Prashant P. Bhansali, and (2) Parag P. Bhansali, and his daughter, Manisha P. Bhansali. The joint family properties consist of interests in the following partnership firms in which the karta is a partner, holding a share therein as set out below : <FRM>JUDGEMENT_259_ITR229_1998Html1.htm</FRM>

(2.) THE manager of the Hindu undivided family, viz., the father, and his major and minor sons, who are other coparceners, decided to effect a partial partition, dated April 1, 1977, of the interests of the joint family in two of the partnership firms, viz., Warwick Estates Syndicate and Kairbetta Estates Syndicate, as a first step towards a progressive and final partition of the family properties. In pursuance of the said decision, the karta has effected partition in the books of the family, 8/128 share in the partnership firm of Warwick Estates Syndicate and 5/64 share in the partnership firm of Kairbetta Estates Syndicate as between him and his sons by way of partial partition allocating 1/3rd share out of 8/128 to his major son and retaining 2/3rd share out of 8/128 for himself and his minor son in the firm of Warwick Estates Syndicate and allocating 1/3rd share of 5/64 share to his major son and retaining 2/3rd share out of 5/64 share for himself and his minor son in the firm of Kairbetta Estates Syndicate.

(3.) ON the other hand, learned Additional Government Pleader (Taxes) appearing on behalf of the Department, submitted that the partition deed, dated April 1, 1977, is not a registered deed. Without dividing the agricultural lands by metes and bounds and by dividing the income from the agricultural lands alone, the assessee cannot ask for recognising the partition. According to the learned Additional Government Pleader, the Assessing Officer has not conducted any enquiry as contemplated under section 29 of the Act. Since the Assessing Officer failed to conduct the enquiry as contemplated under section 29 of the Act, the assessment orders passed by the Assessing Officer for the assessment years under consideration are vitiated. According to the learned Additional Government Pleader, dividing the coparcenary property by an unregistered partition deed and the entry of the income derived from the firm in the books of account alone are not sufficient to make separate assessments in the hands of each of the coparceners as requested by the assessee. Therefore, according to the learned Additional Government Pleader, inasmuch as the lands are still the property of the joint family and inasmuch as the Assessing Officer failed to follow the procedure prescribed under section 29 of the Act, the Commissioner of Agricultural Income-tax was perfectly justified in invoking his jurisdiction under section 34 of the Act and setting aside the assessments.