The validity of a partial partition under the Income-tax Act depends on the allocation of shares and compensation to the parties involved.

Headnote:
Partition - Income-tax Act - Validity of partial partition
Fact of the Case:

The case involved a question regarding the validity of a partial partition under the Income-tax Act, 1961. The Tribunal found that a party to the partition was neither allocated any share nor compensated in lieu of non-allocation of share.
Finding of the Court:

The court agreed with the Tribunal's finding that the partial partition was not valid, based on the fact that one party was not allocated any portion of the properties or compensated for the loss of her share.
Issues: Validity of partial partition under the Income-tax Act, 1961
Ratio Decidendi: The court relied on the finding of fact by the Tribunal that one party was not allocated any share or compensated, leading to the conclusion that the partial partition was not valid.
Final Decision: The reference was answered in the affirmative, in favor of the Department and against the assessee.

( 1 ) THIS is an application under Section 256 (2) of the Income-tax Act, 1961, in which the following question has been referred to us for our opinion : "whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that partial partition dated April 1, 1973, was invalid as Smt. Sewti Devi, a party to the said partition, was on partition neither allocated any share nor otherwise compensated in lien of non-allocation of share ?"

( 2 ) LEARNED counsel for the assessee has invited our attention to the decision of a Division Bench of this court in the case of CIT v. Brahma Swarup and Sons [2002] 253 ITR 604. This decision is distinguishable. In the present case the finding of fact recorded by the Tribunal in para. 4 of its order is that the mother, Smt. Sewti Devi, was allocated no portion of the properties under division nor was she compensated in lieu of the loss of her share in the said properties. We are in agreement with the view taken by the learned Tribunal that it was not a valid partition. The reference is therefore, answered in the affirmative, i. e. , in favour of the Department and against the assessee.

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2003 Supreme(All) 512

HIGH COURT OF ALLAHABADM. Katju and Prakash Krishna, JJ. Mahendra Kumar Sewti Devi VersusCommissioner of Income-tax INCOME-TAX REFERENCE 222 of 1981Decided On : 10 March 2003 Income-tax Reference 222 Of 1981

The validity of a partial partition under the Income-tax Act depends on the allocation of shares and compensation to the parties involved.

HIGH COURT OF ALLAHABAD
M. Katju and Prakash Krishna, JJ.
Mahendra Kumar Sewti Devi
Versus
Commissioner of Income-tax
INCOME-TAX REFERENCE 222 of 1981
Decided On : 10 March 2003
Income-tax Reference 222 Of 1981