COMMISSIONER OF WEALTH TAX Vs. P S SRIDHARAN

JUDGEMENT

(1.) THE assessment year involved is 1974-75 and the matter arises under the provisions of the Wealth-tax Act, 1957.

(2.) WE have set out the facts of the assessee's case in a tax case which arose under the provisions of the Income-tax Act for the assessment years 1965-66 to 1969-70 which came up for consideration before us in T.C. No. 890 to 894 of 1983, wherein the judgment was delivered in the said tax cases of even date. WE also noticed that there was a claim for partial partition but there was no order recognising the partial partition passed either under section 171 of the Income-tax Act or under order 20 of the WEalth-tax Act. The assessee filed a return in the status of a Hindu undivided family disclosing a net wealth of Rs. 10,64,034 which was later revised and the assessment was completed including certain amounts. This original assessment made by the WEalth-tax Officer was reopened and according to the WEalth-tax Officer a sum of Rs. 4,36,558 was due to the assessee, but the assessee has shown only half thereof in the return filed. According to the assessee, there was a partial partition between the karta of the family and P. S. Sridharan and only half of the amount was assessed in the hands of the joint family. The WEalth-tax Officer, however, did not accept the contention urged by the assessee and brought to tax the entire sum of Rs. 4,36,558 and completed the reassessment. There were also disputes with reference to the inclusion of the additional compensation amount received by the assessee by virtue of the order of the City Civil Court dated April 20, 1996. The WEalth-tax Officer in the reassessment made included the other sum of Rs. 1,18,137 in the hands of the assessee. The assessee preferred an appeal before the Appellate Assistant Commissioner and the Appellate Assistant Commissioner following his order rendered in the Income-tax assessment proceedings held that only half of the amount was assessable in the hands of the assessee notwithstanding the fact that there was no order passed under section 20 of the WEalth-tax Act recognising the partial partition. On further appeal by the Revenue before the Income-tax Appellate Tribunal, the Appellate Tribunal held notwithstanding the fact that there was no order passed under section 20 of the WEalth-tax Act, only half of the share amount should be assessed in the hands of the assessee, as there was a partial partition on March 31, 1962. The Tribunal also held that the provisions of section 20 of the WEalth-tax Act are not applicable to a case for partial partition and, therefore, even without an order passed under section 20 of the WEalth-tax Act recognising the partial partition, the properties described in the partial partition cannot be assessed in the hands of the joint family. The Tribunal also recorded the finding that from the date of the partial partition, the assessee's family did not own half share in the compensation amount which went out of the family and, therefore, the said amount cannot be included in the hands of the joint family under section 20 of the WEalth-tax Act. Section 20 of the WEalth-tax Act deals with recognition of the claim for total partition of the properties belonging to the Hindu undivided family and section 20 of the WEalth-tax Act reads thus :