Commissioner of Income Tax, Meerut vs Harbans Lal and Sons

The income tax Appellate Tribunal, Delhi, has referred the following question of law u/s 256(1) of the income tax Act, 1961 (''the Act'') for opinion to this Court:

Whether, on the facts and in the circumstances of the case, the I.T.A.T. was legally correct to uphold the order of the Ld. Deputy Commissioner (Appeals) directing to exclude the share income from M/s. Jyoti Finance Corporation from the income of assessee ?"

Briefly stated the facts giving rise to the present reference are as follows:

The reference relates to the assessment years 1975-76 to 1977-78, 1979-80, 1980-81 and 1981-82. The respondent-assessee is an HUF. It has interest in the partnership firm of M/s. Jyoti Finance Corporation. It claimed that on 1-7-1973, there was partial partition in the family. The asset partitioned was interest in the partnership firm of M/s. Jyoti Finance Corporation which was divided between two firms known as Harbans Lal Kamal Kumar and Pradeep Kumar Motia Rani. The claim of partial partition was not accepted by the assessing authority. However, in appeal the same was accepted by the First Appellate Authority which order has been upheld by the Tribunal.

We have heard Shri A.N. Mahajan, the learned standing counsel for the revenue. Nobody has appeared on behalf of the respondent-assessee.

We find that this Court in the case of Commissioner of Income Tax Vs. Shrawan Kumar Swarup and Sons, , in similar circumstances has upheld the claim of partial partition between the various groups.

Respectfully following the aforesaid decision, we are of the considered opinion that the Tribunal has not committed any illegality in upholding the claim of partial partition. We accordingly answer the question referred to us in affirmative, i.e., in favour of the assessee and against the revenue. However, there shall be no order as to costs.