The karta of an HUF has the right to partition the joint family property, and a family arrangement can be entered into by members of a joint Hindu family to maintain peace or bring about harmony in the family.

J.V.Gupta, J.

1. This judgment will dispose of Income-tax References Nos. 77 and 78 of 1976, as both of them arise out of the same order of the Tribunal.

2. At the instance of the revenue, the Income-tax Appellate Tribunal, Amritsar Bench, Amritsar, has referred the following two questions of law for the opinion of this court:

"1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in accepting the claim of the assessee for partial partition ?

2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in deleting the addition of Rs. 6,300 made to the income of the assessee-HUF for the assessment year 1970-71 ? "

3. Shri Narain Das Wadhwa, constituted an HUF along with his son, wife and two unmarried daughters. He died on 19th January, 1964. After his death, his son, Krishan Lal Wadhwa, as karta of the assessee-HUF, constituted by him, his mother and two sisters, was a partner in the firm known as M/s. Paxit Containers. On 15th May, 1969, there was a partial partition in respect of the amount of Rs. 60,000 which stood invest- ed by the assessee-HUF in the said firm. The division of this amount amongst the members of the assessee-HUF was as follows : Rs. 1. Shri Krishan Lal Wadhwa 25,000 2. Smt. Sita Devi 25,000 3. Miss Venna Wadhwa 5,000 4. Miss Chandrika Wadhwa 5,000

4. The entries showing the division of the aforesaid amount of Rs. 60,000 were made in the books of M/s. Paxit Containers. Consequent upon the partial partition, Smt. Sita Devi Wadhwa, the mother, Miss Veena Wadhwa and Miss Chandrika Wadhwa, the sisters, withdrew the amounts of Rs. 25,000, Rs. 5000 and Rs. 5,000, respectively, from M/s. Paxit Containers and invested the same somewhere else. Shri Krishan Lal Wadhwa joined the firm of M/s. Paxit Containers as representative of his smaller HUF, consisting of himself, his wife and a minor child. On 10th July, 1970, the assessee-HUF filed an application under Section 171 of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), requesting the ITO to record a finding as to the partial partition of the joint family property as on 15th May, 1969. In support of this claim each member of the assessee-HUF filed an affidavit. It was also submitted by the assessee in its letters dated 4th June, 1971, and 5th March, 1973, that even though a widowed mother could not claim partition of the joint family property, there was nothing in law to compel the karta of the family to remain joint with his mother and sisters and as such, the partial partition in question, which, in fact, was tantamount to a family arrangement, was valid in the eye of law. The ITO did not accede to this request of the assessee as he was of the view that there must be at least two coparceners for the purpose of effecting a partition of the joint family property and as in the present case, there was only one male coparcener, the partition in question was not valid. He, consequently, rejected the claim of the assessee and by a separate order, added the sum of Rs. 6,300 to the income of the assessee-HUF on account of interest on Rs. 60,000 at 12% per annum for the period from 15th May, 1969 to ,31st March, 1970, relevant to the assessment year 1970-71.

5. On appeal, the AAC accepted the claim of the assessee and deleted the additions of Rs. 60,000 towards the assessable wealth of the HUF and Rs. 6,300 towards the income of the assessee-HUF, referred to above. Against the sai4 order of the AAC, the department went in a second appeal before the Tribunal. The Tribunal held as follows ;

" 10. We have gone through the record and heard the learned representatives of the parties. In our opinion, the orders of the AAC are sound and the same call for no interference.

11. It is true that a widowed mother cannot compel a partition, but if the karta of the family does not want to remain joint with the other members of the family, there is no impediment for him to put an end to the joint