JUDGMENT

V.G. Oak, C.J. - This is a reference u/s 256(1) of the Income Tax Act, 1961. Messrs. Brij Mohan Lal Rameshwar Lal is the assessee. It is a Hindu undivided family. The assessment year is 1962-63.

2. There was a registered firm by the name Messrs. Brij Mohan Lal Rameshwar Lal. Up to the assessment year 1961-62, the firm had two partners, Rameshwar Lal and Kundanlal. The two partners respectively represented their Hindu undivided families. On or about the 2nd of February, 1961, Kundanlal died. On February 3, 1961, the firm was reconstituted, partners of the reconstituted firm were Rameshwar Lal as the karta of his Hindu undivided family, Kundanlal's widow, Smt. Bharbati Devi, and her adopted son Prem Chand. Rameshwar Lal's minor son, Ghanshyam, was admitted to the benefits of the partnership. A fresh partnership deed was drawn up on February 22, 1161. In that partnership deed it was mentioned that out of the capital of the Hindu undivided family of Rameshwar lal, partner, a sum of Rs. 60,000 had been divided equally between Rameshwar Lal, Saraswati Devi and Ghanshyam.

3. At the time of assessment for 1962-63, the Hindu undivided family of Rameshwar Lal set up the partial partition of that sum of Rs. 60,000 and pleaded that that sum did not represent the assessee's assets. This claim was rejected by the Income Tax Officer. He held that there was no effective partial partition, as pleaded by the assessee. Upon that basis, the share of profit received by Ghanshyam, minor, and the interest paid by the new firm to Rameshwar Lal and Saraswati Devi were treated as the income of the assessee family.

4. The assessee filed two separate appeals against the two decisions of the Income Tax Officer. The first appeal was against the order rejecting the assessee's claim with respect to partial partition under Sub-section (2) of Section 171 of the Act. The other appeal was against the assessment for the year 1962-63. Both the appeals were allowed by the Appellate Assistant Commissioner. He held that there was effective partial partition with respect to the sum of Rs. 60,000. Consequently, he directed that the profit paid to Ghanshyam, and the interest paid to Rameshwar Lal and Saraswati Devi should be deleted from the assessee's income.

5. The decisions of the Appellate Assistant Commissioner were challenged by the department by filing two separate appeals. Both the appeals were allowed by the Appellate Tribunal, Allahabad. The Tribunal set aside the order of the Appellate Assistant Commissioner, and restored the decisions of the Income Tax Officer.

6. At the instance of the assessee, the Tribunal has referred the following questions of law to this court :

"(1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that there was no partial partition as claimed by the assessee ?

(2) Whether the share of profit paid to Ghanshyam and the interest paid to Rameshwar Lal and Saraswati Devi by the firm M/s. Brij Mohan Lal Rameshwar Lal was rightly included in the income of the assessee, Hindu undivided family ?"

7. Mr. Brijlal Gupta appearing for the department urged that question No. 1 ought to be answered against the assessee for two reasons. Firstly, there was no genuine partition as claimed by the assessee. Secondly, a division of a part of an asset is not permissible in law.

8. As regards the suggestion that the partial partition was not genuine, we find no indication in the two orders passed by the Tribunal on April 21, 1964, that the Tribunal was persuaded that the so-called partition was fictitious. It is true that during the course of one of the two orders the Tribunal observed :

"It is also curious that the alleged partial partition of the capital standing to the credit of the Hindu undivided family of Rameshwar Lal is not incorporated in the books of the Hindu undivided family or in a separate deed or agreement by the three members of the Hindu undivided family, but is only mentioned in the said partnersh