TaxTMI 
TaxTMI 
1996 (9) TMI 39
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....1977, of the interests of the joint family in two of the partnership firms, viz., Warwick Estates Syndicate and Kairbetta Estates Syndicate, as a first step towards a progressive and final partition of the family properties. In pursuance of the said decision, the karta has effected partition in the books of the family, 8/128 share in the partnership firm of Warwick Estates Syndicate and 5/64 share in the partnership firm of Kairbetta Estates Syndicate as between him and his sons by way of partial partition allocating 1/3rd share out of 8/128 to his major son and retaining 2/3rd share out of 8/128 for himself and his minor son in the firm of Warwick Estates Syndicate and allocating 1/3rd share of 5/64 share to his major son and retaining 2/3rd share out of 5/64 share for himself and his minor son in the firm of Kairbetta Estates Syndicate. Having regard to the structure of the partnership, it is not possible to divide in the books of the firm and have the junior members of the family viz., Prashant P. Bhansali and Parag P. Bhansali, as partners in the said firms. The karta and the junior members have mutually agreed that the karta will hold the 8/128 share in the Warwick Estate S....
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....cultural Income-tax Act. The Commissioner of Agricultural Income-tax was also of the view that the lands owned by the members of the coparcenary were not divided by metes and bounds under the said partial partition deed. Further, the Commissioner was also of the view that the partition deed was not registered. According to the Commissioner of Agricultural Income-tax, it is not sufficient to record the income of the partnership firm in the books of account alone to show that a definite partition took place between the members of the coparcenary. For all these reasons, he held that partial partition of interests of joint family is merely a deed of declaration and is not a valid partition of agricultural lands and it does not attract the provisions of section 29 of the Act. Accordingly, the Commissioner of Agricultural Income-tax set aside the order passed by the Agricultural Income-tax Officer in the assessment years 1977-78 and 1978-79 by exercising his jurisdiction under section 34 of the Act. Learned counsel appearing for the assessee submitted that till the assessment year 1976-77, P. C. Bhansali was assessed in the status of a karta of the Hindu undivided family, consisting o....
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....ficer in the assessment years under consideration are neither erroneous nor prejudicial to the interests of the Revenue. Hence, it was submitted that the order passed by the Commissioner of Agricultural Income-tax, by exercising his power under section 34 of the Act, is unsustainable. On the other hand, learned Additional Government Pleader (Taxes) appearing on behalf of the Department, submitted that the partition deed, dated April 1, 1977, is not a registered deed. Without dividing the agricultural lands by metes and bounds and by dividing the income from the agricultural lands alone, the assessee cannot ask for recognising the partition. According to the learned Additional Government Pleader, the Assessing Officer has not conducted any enquiry as contemplated under section 29 of the Act. Since the Assessing Officer failed to conduct the enquiry as contemplated under section 29 of the Act, the assessment orders passed by the Assessing Officer for the assessment years under consideration are vitiated. According to the learned Additional Government Pleader, dividing the coparcenary property by an unregistered partition deed and the entry of the income derived from the firm in th....
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....terests of the Revenue. According to the Commissioner of Agricultural Income-tax, the Assessing Officer has not conducted any enquiry as contemplated under section 29 of the Agricultural Income-tax Act. Section 29(1) of the Tamilnadu Agricultural Income-tax Act, 1955, states as under : " Where at the time of making an assessment under section 17, it is claimed by or on behalf of any member of a Hindu undivided family, an Aliyasantana family or branch or a Marumakattayam tarwad or tavazhi hitherto assessed as undivided that a partition has taken place among the members or groups of members of such family, branch, tarwad or tavazhi, the Agricultural Income-tax Officer shall make such inquiry thereunto as he may think fit, and if he is satisfied that joint family property has been partitioned among the various members or groups of members in definite portions, he shall record an order to that effect." In his order, the Assessing Officer has clearly stated that he made an enquiry, examined the partition deed and heard the assessee's representative and only after his satisfaction he held that separate assessments should be made in the case of each of the coparceners, as per the pa....
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....Indian income-tax law or the law of partnership which prevented the members of a Hindu joint family from dividing any asset. Such division must, of course, be effective so as to bind the members ; but Hindu law did not further require that the property must in every case be partitioned by metes and bounds, if separate enjoyment could otherwise be secured according to the shares of the members. For an asset of the kind in this case there was no other mode of partition open to the parties if they wished to retain the property and yet hold it not jointly but in severalty, and the law did not contemplate that a person should do the impossible." Similarly, while considering the provisions of section 26A of the Indian Income-tax Act, 1922, the Supreme Court in CIT v. Bagyalakshmi and Co., [1965] 55 ITR 660, held as under : "A partnership is a creature of contract. Under Hindu law a joint family is one of status and right to partition is one of its incidents. The income-tax law gives the Income-tax Officer a power to assess the income of a person in the manner provided by the Act. Except where there is a specific provision of the Income-tax Act which derogates from any other statuto....