Judgment:
V.K. Singhal, J.
1. The Income-tax Appellate Tribunal has referred the following question of law arising out of its order dated September 11, 1981, in respect of the assessment year 1977-78 under Section 256(1) of the Income-tax Act, 1961 :
'Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the partial partition was valid ?'
2. The brief facts of the case are that there was a Hindu undivided family comprising Rashmikant Jain as karta, Smt. Sumedha, wife, and master Mehul (minor son), and Kumari Monish (minor daughter). The assessee-Hindu undivided family filed its return for the assessment year 1977-78 on June 21, 1977, in which below the computation chart the following note was given : 'that there was a partial partition on April 1, 1976, of Rs. 3,05,000 amongst the members of the Hindu undivided family. As such, order under Section 171 may be passed'. The Income-tax Officer issued notices to the other members of the Hindu undivided family and the affidavits of these members were submitted, in which they have admitted the fact of partial partition and the amount was divided and a sum of Rs. 5,000 came to the share of Shri Rashmikant Jain (karta), while Smt. Sumedha (wife), master Mehul and Kumari Monish received Rs. one lakh each. The partial partition was claimed to have been made by debiting the capital account of the Hindu undivided family in the books of Messrs. R.Y. Durlabhji and crediting the divided amounts in the respective accounts of the members. The deed of partial partition dated April 1, 1976, was also submitted. There was a sum of Rs. 5,29,500 standing to the credit of the Hindu undivided family in the books of account of the firm, Messrs. R.Y. Durlabhji, out of which a sum of Rs. 3,05,000 was partitioned. The Income-tax Officer refused to accept the said partition on the ground that the karta in the exercise of his rights as patria potestas could not have carried out the partial partition and he himself could not give his consent on behalf of his minor children to the partition proposed. The claim was accordingly rejected. Reliance was placed on the decision of the Madhya Pradesh High Court in the case of CIT v. Seth Gopaldas (HUF) : [1979]116ITR577(MP) . The interest accrued on these accounts on account of the said partial partition of Rs. 36,600 was accordingly added in the income of the Hindu undivided family. The Commissioner of Income-tax (Appeals) upheld the order of the Income-tax Officer. In the second appeal before the Income-tax Appellate Tribunal, it was submitted that the ratio of the Madhya Pradesh High Court judgment that the karta has power to make a total partition without the consent of coparceners and he has no power to make a partial partition without the consent of the other coparceners is not applicable. The decision of the Privy Council laying down the principle 'that though the partition may be partial by mutual consent of the parties, no coparcener can by suit enforce a partial partition against the other coparceners. The suit must be one for complete partition', was also taken into consideration. On the basis of the decision of the Madhya Pradesh High Court the principle that the partition can be effected with the consent of all the sons of the coparceners and whether or not the karta can give consent on behalf of the minor son, reliance was placed on the decision of the Calcutta High Court in the case of CIT v. Hoshiari Lal Kalyani : [1981]128ITR515(Cal) , wherein it was observed that the partition in Hindu law is effected by a definite and unequivocal indication of a coparcener's intention to separate. Similarly, a partial partition is effected by a definite and unequivocal indication of the coparcener to partition a particular business or property of the joint family leaving the other assets as joint family property. The father as patria potestas can effect a partition in the family if he considers the same to be in the interest of the family'. It is only the aggrieved member of the coparcenary who can challenge a partial partition. On account of the decision of the Calcutta High Court, partial partition should not be to the detriment of the minors and since in the present case, the minors were given Rs. one lakh each, it was observed that the partial partition is not to the detriment of their interest. The karta has received only Rs. 5,000 and only the karta being the father of the minor children has given the consent on behalf of the minor, it was to safeguard the interest of such minor children. The decision of the Punjab High Court in the case of CIT v. Narain Dass Wadhwa was also taken jnto consideration, where also it was held that when the sole male coparcener has full right to alienate the property, it does not stand to reason that he cannot divide the property among the members of the family for the purposes of maintaining peace and harmony in the family. The Tribunal observed that there is evidence to show that a definite and unequivocal intention was there on the part of the members of the family to effect a partial partition, which is clearly borne out from the affidavits and the interest of the minors was safeguarded by their father and the action of the partial partition was also in accordance with law. The additions of interest made were accordingly deleted.
3. The controversy now is settled by the decision of the apex court in Apoorva Shantilal Shah v. CIT : [1983]141ITR558(SC) which reads as under (at page 571) :
'If the father in exercise of his superior right or of his right as patria potestas is entitled to bring about a complete disruption of the joint family and to effect a complete partition of joint family properties of a Hindu joint family consisting of himself and his minor sons even against the wishes of the minors and if a partial partition be permissible with the consent of sons when they have all become major, we see no reason to limit the power or authority of the father to effect the partition only to a case where the partition is total. The superior right or the right of patria potestas which a father enjoys is always expected to be exercised in the best interest of the members of the family and more particularly of his minor sOns. The father, undoubtedly, enjoys the right to bring about a complete disruption of the joint family consisting of himself and his minor sons and to effect a complete partition of the joint family properties even against the will of the minor sons. It is also now recognised that a partial partition of joint family properties is permissible. When a father can bring about a complete partition of the joint family properties between himself and his minor sons even against the will of the minor sons and when partial partition under the Hindu law is now accepted and recognised as valid by judicial decisions, we fail to appreciate on what logical grounds it can be said that the father who can bring about a complete partition of the joint family properties between himself and his minor sons will not be entitled to effect a partial partition of the joint family properties between himself and his minor sons, if the father in the interest of the joint family and its members feels that a partial partition of the properties will be in the best interest of the joint family and its members including the minor sons. Even if the test of consent is to apply, the father as the natural guardian of the minor sons will normally be in a position to give such consent and it cannot be said as a matter of universal application that in all such cases of partition, partial or otherwise, there is bound to be a conflict of interest between the father and his sons. If the father does not act bona fide in the matter when he effects a partition of the joint family properties between himself and his minor sons, whether wholly or partially, the sons on attaining majority may challenge the partition and ask for appropriate reliefs including a proper partition. In appropriate cases, even during minority, the minor sons through a proper guardian may impeach the validity of the partition brought about by the father, either in entirety of the joint family properties, or only in respect of a part thereof, if the partition had been effected by the father to the detriment of the minor sons and to the prejudice of their interests.'
4. From the above decision of the apex court it is clear that the father as karta of the family is entitled to effect partial partition and no consent is necessary. The partition has not been alleged to be sham or fictitious.
5. There is no prohibition under the income-tax law for the partial partition during the relevant year and the said partial partition could not be said to be to the detriment of the minors inasmuch as they were given Rs. 1 lakh each and the karta who has exercised the power has received Rs. 5,000 alone. If a person has power to make a total partition he has the power to make a partial partition.
6. In the present case, the intention of the co-partitioners has also been taken into consideration when their affidavits were filed and it was found as a fact that there was unequivocal intention on the part of the members of the family to effect the partial partition.
7. In view of the judgment in Apoorva Shantilal Shah's case : [1983]141ITR558(SC) referred to above and the finding which has been recorded by the Tribunal, it is held that it was not necessary to have the consent of the other minor sons before effecting the partial partition. The Tribunal was, therefore, justified in holding that the partial partition was valid.
8. The reference is accordingly answered in favour of the assessee and against the Revenue.