TaxTMI 
TaxTMI 
2015 (2) TMI 290
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....h, of the six minor daughters of Karta of HUF and that amount was in the form of Fixed Deposit Receipts (FDRs). In the context of the deduction of the interest that accrued on the FDRs, the Assessing Officer examined the document from the point of view of Section 171 of the Act. He came to the conclusion that the document does not amount to partial partition and though it is a family arrangement, it does not have the effect of taking away the corresponding wealth from the purview of HUF, and accordingly, treated the same, as the income of the HUF. Similar question arose for subsequent assessment years, and identical view was taken. Feeling aggrieved by the orders of assessment, the appellant approached the Commissioner of Income Tax (Appeals). The appeals were allowed by the Commissioner, through order, dated 09.05.1997. The Revenue filed I.T.A.Nos.1326 to 1328 of 1997 and 113, 114 and 116 of 2001, before the Tribunal. The appeals were allowed through a common order and the order passed by the Commissioner was set aside. Hence, these appeals under Section 260A of the Act, by the assessee. Sri Pushyam Kiran, learned counsel for the appellant, submits that the Assessing Officer him....
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....as a partial partition, based upon clause IV thereof, which is to the effect that six daughters in whose favour the arrangement was made, shall cease to have any share in the joint family property. However, he gave up the analysis in that direction, rightly, in fact, taking note of the fact that no member of the joint family has come forward with the plea under sub-section (3) of Section 171 of the Act. As is well-known, Section 171 of the Act deals with the assessment of a HUF, after the partition is affected. The presumption as to the continued existence of undivided family, flows from sub- section (1) and the burden to prove any plea to the contrary is based upon the one, who claims partition. The provision reads: 171. Assessment after partition of a Hindu undivided family:- (1) a Hindu family hitherto assessed as undivided shall be deemed for the purposes of this Act to continue to be a Hindu undivided family, except where and in so far as a finding of partition has been given under this section in respect of the Hindu undivided family. (2) Where, at....
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....l phenomena that does not fit into those which are specifically recognised under law. The transfer of immovable or movable property, as the case may be, does take place under the arrangement, but it is substantially different from the one that is contemplated under the Transfer of Property Act or the Sale of Goods Act. No formal registered document is executed and the nature of consideration is not amenable to any legal analysis. The purport of the family arrangements was explained by the Supreme Court in Kales case (1 supra), in such a way that is difficult to put it in any different words. The relevant portion reads: Before dealing with the respective contentions put forward by the parties, we would like to discuss in general the effect and value of family arrangements entered into between the parties with a view to resolving disputes once for all. By virtue of a family settlement or arrangement members of a family descending from a common ancestor or a near relation seek to sink their differences and disputes, settle and resolve their conflicting claims or disputed titles once for all in order to buy peace of mind and bring about complete harmony and goodwill in the family. The....
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....e, therefore, leaned in favour of upholding a family arrangement instead of disturbing the same on technical or trivial grounds. Where the courts find that the family arrangement suffers from a legal lacuna or a formal defect the rule of estoppel is pressed into service and is applied to shut out plea of the person who being a party to family arrangement seeks to unsettle a settled dispute and claims to revoke the family arrangement under which he has himself enjoyed some material benefits. The contemporary social scientists or those who claim to be so have to reconsider their approach towards the expressions like egalitarian society or social justice, if they happen to understand the message contained in the famous judgment. Unfortunately those two expressions have been pressed into service in the past few decades to connote not so noble and congenial ideas but only disruptive and divisive ideas. Obviously because the sacred and legal character attributed by the Honble Supreme Court, to the family settlement was not brought to its notice, the Tribunal observed: If it is not a partition and just a family arrangement, we do not see how the assets and income therefrom do not conti....