COMMISSIONER OF INCOME TAX Vs. SETH GOPALDAS HUF

JUDGEMENT

(1.) THIS reference under Section 256(1) of the Income -tax Act, 1961 (hereinafter called " the Act"), has been made at the instance of the Commissioner of Income -tax to answer certain questions, said to arise out of the order dated June 15, 1970, of the Income -tax Appellate Tribunal, Indore Bench, Indore, in I.T.A. No. 338 (Ind) of 1969 -70. The questions so referred for the opinion of this court are the following, viz:

(2.) THE assessee is a HUF of which Seth Gopaldas of Ichhawar is the "karta". THE relevant assessment year is 1964 -65, for which the accounting period ended on Diwali, 1963, i.e., October 20, 1963. THE assessee was assessed as a HUF up to the assessment year. 1963 -64. For the assessment year 1963 -64, an application was made on July 6, 1963, under Section 171 of the Act, for recording a finding of total partition in respect of this HUF. However, that application was rejected and the assessee's claim of total partition was not recognised.

(3.) BY a registered deed" of partition dated October 23, 1962, Seth Gopaldas, in exercise of his right as patria, potestas, without the consent of his sons, who were all then minors, effected a partition of the family properties specified therein, describing that partition as a total partition. Similarly, on October 27, 1962, Seth Gopaldas, in exercise of his right as patria potestas, partitioned certain movables which were not covered by the partition deed dated October 23, 1962. In the present case it has not been disputed at any stage that the partition so made by Seth Gopaldas without the consent of his sons, in exercise of his right as patria potestas, admittedly, did not include the entire family properties and was at best only a partial partition of the family properties. This fact was undisputed because in a raid by the income -tax authorities of the premises of the assessee on January 23, 1965, certain account books and fixed deposit receipts were seized which clearly showed that the HUF owned also the amounts so discovered in the raid which had not been included in the partition made on October 23, 1962, and October 27, 1962. Obviously because of this discovery as a result of which the partition made on October 23, 1962, and October 27, 1962, could not be treated as a total partition, a claim for recording partial partition only under Section 171 of the Act was made by Seth Gopaldas in place of the original prayer for recording a total partition, His eldest son, Mahendra Kumar, having also become major by then, another application for the same purpose under Section 171 of the Act was made on January 16, 1969, by Mahendra Kumar.