COMMISSIONER OF INCOME TAX Vs. SHANKARLAL

JUDGEMENT

(1.) A HUF of Shankar Lal, through him as Karta, was a partner in two firms. On March 14, 1974, a deed of partial partition was executed and was made effective from April 1, 1973. On April 1, 1973, Rs. 1,54,679.41 was the credit balance of the HUF in those firms. In view of the partial partition, the amount was equally divided between the four members of the HUF in the books of account of the HUF which was reflected in the books of account of the two firms, and they were to divide the profit and loss from those firms in equal shares. For the asst. yr. 1974-75, an application under s. 171 of the IT Act, 1961 (for short "the Act"), was filed by the HUF to get the partial partition recognised.

(2.) THE ITO rejected the partial partition. On the assessee's appeal, the AAC accepted the partition. The Department failed in the appeal before the Tribunal, and at the instance of the Department, the Tribunal, Amritsar, has referred the following question for opinion :

(3.) ACCORDINGLY , the referred question is answered in favour of the assessee, that is, in the affirmative. No costs.