Notional partition under Hindu succession law does not itself create an actual HUF disruption; tax partition claim rejected.

The deeming fiction in section 6 of the Hindu Succession Act operates only to compute the deceased coparcener's notional share and the succession that follows; it does not by itself cause an actual disruption or complete partition of a Hindu undivided family. On that footing, the Tribunal's view that a complete partition occurred on the death of a coparcener was incorrect. The Assessing Officer was therefore entitled to apply section 171(9) of the Income-tax Act, 1961, and the claim that the family stood fully partitioned was rejected.

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Issues: Whether the Tribunal was correct in holding that the Assessing Officer could not apply section 171(9) of the Income-tax Act, 1961 and in directing a finding of complete partition on the death of a coparcener in a Hindu undivided family.

Analysis: The reference turned on the effect of section 6 of the Hindu Succession Act and its Explanation 1. The legal fiction created for determining the share of a deceased coparcener operates only for the limited purpose of ascertaining succession and the shares to be allotted in a notional partition immediately before death. That fiction does not mean that there is an actual disruption of the Hindu undivided family or an ipso facto partition on the death of a male coparcener. The earlier Supreme Court decision relied upon by the assessee was confined to the quantification of a widow's share and did not lay down that the family stands disrupted on death. Accordingly, the Tribunal's reliance on that principle to hold that a complete partition had taken place was misplaced.

Conclusion: The question referred was answered in the negative. The Assessing Officer was right in applying section 171(9) of the Income-tax Act, 1961, and the claim of complete partition was not accepted.

Final Conclusion: The legal position affirmed is that the fiction under section 6 of the Hindu Succession Act does not by itself bring about an actual partition or disruption of a Hindu undivided family, and the Revenue succeeded on the reference.

Ratio Decidendi: The deeming fiction of a notional partition under section 6 of the Hindu Succession Act is confined to computation of shares and does not, by itself, effect an actual partition or disruption of the Hindu undivided family.

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