TaxTMI 
TaxTMI 
1973 (11) TMI 10
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....962, the Tribunal was right in allowing partial partition as from January 1, 1961?" At the outset facts may be stated in a narrow compass. There was a Hindu undivided family consisting of several coparceners as also other members of the joint family. The names and styles under which the family carried on business or owned and managed immovable properties from which also it derived income were: (1) Messrs. Ghan Shyam Das Lakshminarayan, and (2) L. N. Agarwalla and Brothers. In the course of the assessment proceeding for the assessment year 1961-62, Shri H.P. Agarwalla, one of the members of the Hindu undivided family aforesaid, filed a petition on December 16, 1963, before the Income-tax Officer under section 171 of the Act and claimed that the Hindu undivided family stood disrupted on and from January 1, 1961, and properties stood partitioned from that date. There is no dispute that in the present reference we are concerned with partition of the immovable properties belonging to the erstwhile Hindu undivided family. Business belonging to the family had not been partitioned in the previous year relevant to the assessment year 1961-62. Shri Agarwalla, in support of his claim for par....
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....ircumstances of the case, the Tribunal was right in law in giving effect to the claim of partial partition under section 171 of the Income-tax Act, 1961, with effect from January 1, 1961, as against the decision of the departmental authorities that the claim was fit to be allowed with effect from February 2, 1962 ?" One of the parties to the agreement was Shrimati Janki Devi, the third party. As mentioned in clause 4 of the award, she waived her right to claim a share on partition amongst her sons and grandsons and, therefore, no property was allotted to her. The other parties were in four groups described as first, second, fourth and fifth parties. In paragraph 2 of the award it was adjudged and declared by the arbitrator that the first and second parties had each one-third share and the fourth and fifth parties had each one-sixth share. Thereafter, in clause 3 the arbitrator stated: "That I further adjudge and allot to the parties of the first, second, fourth and fifth parties the properties described in the lots A, B, C and D respectively." As mentioned in clause 7 of the award, parties were to come into possession of their respective properties within twenty-seven months fro....
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....f the said property shall be restored within 1962 to the party to whom it has been allotted under this deed of partition and until then, the party occupying shall not pay any rental for the use and occupation of the said property to the party to whom the said property has been allotted." Paragraph 8(b) of the deed states: "(8) It is hereby agreed among the parties as follows: - . ...... (b) The properties hereby allotted to each party shall be entered upon and henceforth held in severalty by such party without any interruption or disturbance by the other party or any one claiming through under or in trust for it." Paragraph 9 also should be quoted as the recital in this paragraph seems to have influenced the judgment of the Tribunal. Argument upon its basis was advanced before us also. It says : "(9) It is hereby agreed that each party will be entitled to realise the arrears of rent from the 1st January, 1961, in respect of the property allotted to it and the other party hereby assigns its undivided right and interest in such arrears." Section 171 of the Act replaces with substantial variations section 25A of the Indian Income-tax Act, 1922. Recognition to partial partition ....
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....out partition by metes and bounds of the properties mentioned therein with effect from February 2, 1962, the date of the execution of the deed, as under section 47 of the Registration Act, on its registration, the effect will relate back to the date of the execution. The effect of the award which was unregistered will be presently considered. But, before that is done, I shall discuss the recitals in the two documents. The effect of the recital on a question of fact was that the parties accepted the award and agreed to abide by it, meaning thereby that they agreed to partition their properties by metes and bounds in accordance with the award made by the arbitrator. Such a construction on the statement in the award is amply supported by the recitals of the partition deed. The recital in the first paragraph of the preamble was undoubtedly incorrect. The joint Hindu family had come to an end surely from the date of the award--January 1, 1961--if not from December 23, 1960, the date of the arbitration agreement. To be more accurate, the Supreme Court has said in Kashinathsa Yamosa Kabadi v. Narsingsa Bhaskarsa Kabadi that the disruption of the family is from the date of the arbitration ....
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....y the arbitrator in the eye of law ? Had it been a registered award, there could have been no difficulty in taking the view that the award, by its own force, as held by the Supreme Court in Satish Kumar v. Surinder Kumar had the effect of bringing about partition by metes and bounds of the properties mentioned in the various schedules appended to the award. The recital in the arbitration agreement that the parties agree to abide by the award would have been sufficient to bring about this result of the award in law even without there being any express acceptance of it in the award itself. The Supreme Court, after quoting a passage with approval from an unreported decision of that court given earlier, has said in paragraph 9: "This judgment is binding on us. In our opinion, this judgment lays down that the position under the Act is in no way different from what it was before the Act came into force, and that an award has some legal force and is not a mere waste paper. If the award in question is not a mere waste paper but has some legal effect it plainly purports to or affects property within the meaning of section 17(1)(b) of the Registration Act." Upsetting the view of the Full B....