COMMISSIONER OF WEALTH TAX Vs. PARMATMA SARAN HUF

JUDGEMENT

(1.) The Tribunal, Delhi, has referred the following question of law under Section 27(1) of the WT Act, 1957, hereinafter referred to as the Act, for opinion of this Court :

(2.) Briefly stated facts giving rise to the present reference are as follows : The respondent-assessee is an HUF. According to it, it had effected partial partition of the HUF property on 25th Jan., 1979 effective from 1st Jan., 1979. At the time of filing of the return for the asst. yr. 1979-80, the respondent-assessee excluded the properties partitioned in the said partial partition dt. 25th Jan., 1979. The WTO, however, ignored the claim of the assessee on the ground that according to the provisions of Section 171(9) of the IT Act, 1961 the immovable property belonging to the HUF will be assessed as it was in the WT assessment of the assessee for the asst. yr. 1978-79. He also referred to the similar amendment made in the WT Act, being Section 20A of the Act. The AAC has rejected the appeal filed by the assessee. On further appeal, the Tribunal allowed the claim of the assessee and held that partial partition effected on 25th Jan., 1979 should be given recognition as the amendment made by Section 20A of the Act was applied only for the asst. yr. 1980-81.

(3.) We have heard Shri A.N. Mahajan, learned counsel for the Revenue. Nobody has put in appearance on behalf of the assessee. The learned counsel for the Revenue submitted that on a plain reading of Section 20A of the Act, which was inserted by Finance (No. 2) Act, 1980 w.e.f. 1st April, 1980, a partial partition which has taken place after 31st day of December, 1978, has not been recognised and the HUF would continue to be assessed under the Act as no such partial partition had taken place. According to him, as partial partition in the present case had taken place on 25th Jan., 1979 w.e.f. 1st Jan., 1979, the same has to be ignored altogether. He further submitted that Explanation to Section 20A of the Act adopted the same meaning to the partial partition as has been given in Clause (b) of the Explanation to Section 171 of the IT Act for the purposes of this section also and, therefore, any partial partition effected after 31st Dec., 1978 cannot be taken into consideration. He relied upon the Constitution Bench decision of the Hon'ble Supreme Court in the case of Union of India and Ors. v. M.V. Valliappan and Ors., Etc. (1999) 238 ITR 1027 (SC).