KALLOOMAL TAPESWARI PRASAD (HUF), KANPUR versus THE C. I T., KANPUR

Citation: [1982] 3 S.C.R. 9 · Decided: 12-01-1982 · Supreme Court of India · Bench: R.S. PATHAK · Disposal: Disposed off

Judgment (excerpt)

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KALLOOMAL TAPESWARI PRASAD (HUF), KANPUR 
A 
V, 
THE C. L T., KANPUR 
(AND VICE VERSA) 
January 12, 1982 
(R. S. PATHAK AND E. S, VENKATARAMIAH, JJ.] 
Income Tax Act 1961, S. 171-Scope of, 
Hindu Undivided Fam(ly-Ora/ panition in respect of immovable proparti~­
Properties incapable of physical division in equal shares-Capable of division by 
apPortionment and equali1alion by payment ofmCJney-."dere severa11ce of status-
Nor sufficient to record finding of partition-Whether entitles the inclusion of 
income from an asset which has ceased to belong to the Joint family in the 
assessment of joint Hindu family. 
Hindu Law-Partition-What is-How brought about-Partition may be 
total or partial. 
The assessee, a Hindu Undivided Family was deriving income from 
various sources ,-such as income from property, income from money-lending 
business, income from speculaiion business and cloth bttsiness etc. There was a 
partial partition in the family in the year 1951, which was accepted and acted 
upon by the Income ta:t department, whereafter the doth business was treated as 
the business of a ti.Cm consisting of most of the coparceners as partners. On 
December 1, 1963 which fell within the assessment year 1964.65 there was another. 
partial partition orally, as a result of which eighteen immovable properties were 
divided amongst the ten members of the family: who held those properties as 
tenants-in-common from that date. These eighteen immovable properties were 
situated in different places and their valuation was about Rs. 7 lacs. 
In the course of assessment proceedings; the assessee claimed that the 
mem bcrs of the family had commenced to maintain separate accounts with regard 
to the income from the eighteen immovable properties and to divide the nett 
profits amongst themselves according to their respective shares at the end of the 
year. When required by the Income-tax Officer to explain as to why the proper· 
ties were not divided in definite portions as required by section 171 of the Income 
Tax Act 1961, the assessee·stated that physical partition of the properties ainongst 
the ten members was impossible and th" only way to partition those properties 
was to define the respective shares and to enjoy the income from them separately. 
In support of his contention that the properties did not admit of physical division 
the assesse.e relied on an arbitration award. The Income-tax Officer did not'agrec 
with the assessce's contention that it was not possible to divide the properties iU 
definite portions. He rejected the claim of panial partition in respect of the 
eighteen immovable properties and proceeded to assess the income derived there-
from in the hands of the assessee. 
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SUPREME COUltT REPORTS 
[1982) 3 S.C.R. 
The assessec ft.led an appeal before the Appellate Assistant Commissioner. 
During the pendency of the appeal the assessec appointed another arbitrator to 
examine the possibility of physical division of each of the eighteen properties into 
ten portions. The artitrator by his award stated that the properties were not 
capable of physical division into ten shares by metes and bounds and that any 
practical division was that of allocation of proportionate shares in an the eighteen 
properties. The Appellate Assistant Commissioner held that the case of the 
assessee that it was not possible to divide the properties physically as untenable 
and dismissed the appeal. 
In.further appeal to the Tribunal, the Tribunal held that the contention of 
the assessec that if the properties had been divided into ten shares they would 
have been either. destroyed or would have lost their values was not correct, and 
that the claim of the assessee under section 171 of the Act that there was a partial 
partition was to b.! rejected. 
On an application by .the asscssee under section 256 ·(l) of the Act, the 
Tribunal referred two questions to the High Court : (1) Whether the Tribunal was 
right in holding that the properties in dispute were capable of division in definite 
portions amongst the ten coparceners as contemplated in Explanation (a) (i) to 
section 171 of the Act, and (2) whether the Tribunal was justified in holding that 
the income from the properties in dispute which were accepted to have been 
partitioned under the Hindu Law but with regard to which an order accepting the 
claim of partial partition was not made was liable to be included in 

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