Section 171 partition fiction extends to agricultural income computation for rate purposes when no valid family partition is recognised.

Where a partial partition of a Hindu undivided family is not recognised under section 171 of the Income-tax Act, the family is deemed to continue for assessment purposes until a valid partition by metes and bounds is established. That deeming fiction applies to the assessment machinery as a whole, so net agricultural income attributable to the family property cannot be excluded from aggregation for rate purposes. The Finance Act operates only as a supplement to the Income-tax Act, and rule 12 of Part IV does not displace the section 171 fiction. The assessee's contention was rejected and the revenue's view was accepted.

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Issues: Whether, when a claimed partial partition of a Hindu undivided family was not recognised under section 171 of the Income-tax Act, 1961, the net agricultural income attributable to the family property could still be excluded from aggregation for rate purposes.

Analysis: The finding of partition under section 171 depends on compliance with the statutory conditions, including division of the property by metes and bounds. Where that finding is not given, the Hindu undivided family is deemed to continue for assessment purposes. The Finance Act is only a supplement to the Income-tax Act, 1961, and rule 12 of Part IV gives the Income-tax Officer the same powers for computing net agricultural income as are available under the Act for assessment of total income. The deeming provision in section 171 therefore governs the assessment as a whole and cannot be confined only to taxable income while excluding agricultural income used for rate purposes.

Conclusion: The net agricultural income had to be aggregated for rate purposes because the partial partition had not been recognised under section 171; the assessee's contention was rejected and the revenue succeeded.

Final Conclusion: The statutory fiction of continued Hindu undivided family status applied to the entire assessment machinery, including computation of agricultural income for rate purposes, until a valid partition was recognised.

Ratio Decidendi: When a partial partition is not recognised under section 171 of the Income-tax Act, 1961, the deeming continuation of the Hindu undivided family extends to agricultural income computation for rate purposes as well, because the Finance Act operates only as a supplement to the Act.

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