TULSIDAS KUNDANMAL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal, Indore Bench, Indore, at the instance of the assesses, has referred the following questions of law for the opinion of this court, under Section 256(1) of the Income-tax Act, 1961 :

(2.) THE facts giving rise to this petition may be stated, in brief, thus : THE assessee, Tulsidas Kundanmal, being a joint Hindu undivided family was assessed in the status of a Hindu undivided family. THE assessment years in question are 1973-74, 1975 76 and 1976-77. One Shri Kundanmal was the karta of the said Hindu undivided family A Besides the said karta, the other members of the Hindu undivided family are karta's wife, one major son, Shri Arjundas, and five minor sons. THE total strength of the Hindu undivided family thus came to eight. Shri Kundanmal, the karta of the Hindu undivided family, separated himself from the Hindu undivided family on November 1, 1971, by a deed of partial partition dated November 1, 1971, after getting Rs. 5,000 as his share. THE Income-tax Officer considered the said partition as curious, unusual and very strange. According to him, a partition may be possible between the karta and his sons but there cannot be a conceivable partition where the wife of the karta gets separated from him and goes alone with the sons as in the instant case. He thought that it is difficult to consider the situation, where the karta himself separates from the Hindu undivided family. THE Income-tax Officer, therefore, felt that the old tree falls along with the branches and leaves. THE root of the tree is uprooted. THE Income-tax Officer, in these circumstances, negatived the assessee's claim of partial partition.

(3.) LEARNED counsel for the assessee submitted that Section 171 of the Income-tax Act permitted partial partition up to December 31, 1978, as would be clear from Sub-section (9) of Section 171 of the Income-tax Act, 1961. He, therefore, submitted that under the Hindu law, there was no bar for Shri Kundanmal as karta of the Hindu undivided family to relinquish his share and that thereafter his major son, Arjundas, became the karta of the Hindu undivided family who also filed returns of the Hindu undivided family under his signature after 1971. He, therefore, submitted that merely because the wife of Shri Kundanmal chose to remain with her sons and not with her husband would not in any way make the partial partition illegal or not genuine because admittedly the wife was not given any share in that partition. On the contrary, the deed of partition specifically mentions that hereafter the joint family would continue to carry on the same business. He, therefore, submitted that the Tribunal was not justified in holding that there was no legal partial partition or that the partnership firm which subsequently came into existence was not genuine. He placed reliance on the decision in Bhagwati Prasad Sah v. Dulhin Rameshwari Kuer, AIR 1952 SC 72, wherein it has been held that (at page 74) :