COMMISSIONER OF Income Tax vs SHRI KESHO RAM (HUF).

R. M. SAHAI J. - The following question of law has been referred by the Income Tax Appellate Tribunal u/s 256(1) of the Income Tax Act for the opinion of this court :

"Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct in upholding the order of the Appellate Assistant Commissioner deleting the addition of Rs. 31,456 representing the income of the three group Hindu undivided families, Keshoram Shanti Devi, Vijay Kumar Ashok Kumar and Jugmander Dass Dinesh Kumar ?"

The assessee is a Hindu undivided family. It filed a return of its income and claimed that the income earned by so-called group Hindu undivided families styled as Kesho Ram Shanti Devi, Vijay Kumar Ashok Ashok Kumar and Jugmander Dass Dinesh Kumar should not be added in the income of the assessee as partial partition had been effected. This claim of the assess was not accepted by the Income Tax Officer but the Appellate Assistant Commissioner recorded a finding in favour of the assessee and held that the partial partition effected in the case of each Hindu undivided family in the groups of members was a valid partition. This was affirmed by the Tribunal.

The legal position on partial partition is well settled. In Apoorva Shantilal Shah, HUF Vs. Commissioner of Income Tax, Gujarat-I, Ahmedabad, it has been held by the Supreme Court that partial partitions of joint family properties were permissible. It has also been held in Daya Shanker Vijay Kumar Vs. Commissioner of Income Tax, that partial partition may be made as to property or as to persons and no particular method was required to effect a partition. In Commissioner of Income Tax, Tamil Nadu-IV Vs. M.R.M.M.M.M. Manickam Chettiar, . It was held that the novelty or the peculiarity of the procedure adopted by the assessee in making a partial partition did not effect its validity. To the same effect is the decision in Moti Lal Shyam Sunder v. CIT [1972] 84 ITR 180 . In Brij Mohan Lal Rameshwar Lal Vs. Commissioner of Income Tax, it was held that partial partition having been recognised by section 171 of the Act, it was permissible in law. The finding recorded by the Tribunal that partial partition was effected among the members of the family could not be assailed. If the finding on partial partition does not suffer from any infirmity, the question referred by the Tribunal has to be answered against the Department and in favour of the assessee.

In the result, the question referred to us is decided in the affirmative, against the Department and favour of the assessee by the holding that the Tribunal was correct in deleting the addition of the amount of Rs. 31,456 representing the income of three group Hindu undivided families, Keshoram Shanti Devi, Vijay Kumar Ashok kumar and Jugmander Dass Dinesh kumar. The assessee shall be entitled to costs.