1. What is Partition?
per J C Ghose in the Principles of Hindu Law : “Partition is the adjustment of diverse rights regarding the whole by distributing them in particular portions of the aggregate.”
1.1 The ‘true character of a partition’ is that it converts joint enjoyment into enjoyment in severalty. CIT v. Smt. Angira Devi, (2001) 250 ITR 173, 177 (Del.)
1.2. Partition is a division between co-owners (whether co-parceners, joint-tenants in common) of lands, tenements and heraditaments held by them, the effect of such division being that the joint ownership is terminated and the shares of the parties vested in them in severalty.
1.3 From a layman’s point of view, Partition can be said to be the Act of dissolution of the HuF and devolution of the assets & properties of the HuF amongs its coparceners / members / smaller HuF’s.
1.4 Partition results in the severance of the status of the Joint Hindu Family.
2. What can be the reasons leading to Partition?
A partition can may be effected so as to derive the maximum advantage and such a partition cannot be said to be a sham transaction.
– Ram Nath Panda v. CIT 84 ITR 309 (Ori.)
3. Right of a father to effect partition.
A Hindu father under mitakshara can by exercising his patria potestas can effect a partition, partial or total, between himself and his sons, without their consent.
Further, the father has power to effect a division not only between himself and his sons but also between the sons inter-se . However, in such a case, father’s power must be exercised bona fide and in accordance with the law; the division must not be unfair and allotments must be equal.
– See Apoorva Shantilal Shah v. CIT 141 ITR 558 (SC)
patria potestas, (Latin: “power of a father”) In family law, the power that the male head of a family exercised over his children and his more remote descendants in the male line, whatever their age, as well as over those brought into the family by adoption.
4. Division by metes & bounds .
4.1 Partition under Hindu Law can be Total or Partial – as to members or as to Property / Assets. In a Partial Partition, vis-a-vis Members, some Members may go out on Partition and other members continue to be the members of the family; or a Partial Partition vis-a-vis Properties, some of the properties are divided among the members and other properties continue to be properties of the Family.
4.2 In a Total Partition by metes & bounds – all the members cease to be members of the HUF and all the properties cease to be properties belonging to the said HUF. While the Civil Laws of the Country recognise both a Partial Partition and a Total Partition, by virtue of Section 171(9) of the Income Tax Act, 1961 – a Total Partition by metes & bounds is neccessary to file a claim or Partition and to recognise such Partition under the Income Tax Act.
4.3 Explanation (a) to Section 171 contemplates an actual partition by metes & bounds of HUF property.
If it is not possible to have a physical division, then an adjustment will have to be made amongst coparceners to comply with the requirement u/s 171.
An apportionment on a equitable basis having regard to all relevant factors and, if necessary, by asking the parties to make payment to equalise the shares, is also the kind of physical division required u/s 171.
– See Kalloomal Japeshwari Prasad (HUF) 133 ITR 690 (SC).
It can be said that Section 171 contemplates, a partition by metes & bounds, after the partition the existing coparceners would become exclusive owners of the property so allotted.
– See Nand Kishore Das v. State of Orissa 87 ITR 555 (Ori.)
5. Change in ownership but No Transfer of property due to Partition.
It is now well settled that there is a change in ownership of property as a result of partition but does not involve transfer of property.
Principal Judgement in this regard:
” Partition does not give him (a coparcener) a title or create a title in him, it only enables him to obtain what us his own in a definite and specific form for purposes of disposition independent of the wishes of his former co-sharers.”
– Privy Council in Girija Bai v. Sadashiv Dhundo raj (1916) 43 TA 151
Similar view has been reiterated by the Supreme Court of India in Ammathayee alias Perumalappal v. Kumaresan AIR 1967 SC 569.
” On partition, antecedent title possessed by each coparcener is transformed on partition into separate titles of individual coparceners. The nature of transaction is not transfer, but creates a division of jointness into separation. To put it differently, an undivided Family becomes divided in conformity with the shares of each individual.”
5.1 Partition is really a process in and by which a joint enjoyment is transferred into an enjoyment in severalty. Each one of the sharers had an antecedent title and therefore, no conveyance is involved in the process, as a conferment of a new title is not necessary. CED v. Kantilal Trikamlal (1976) 105 ITR 92,101 (SC)
6. Recording of Partition Agreement
An agreement to separate is not required to be in writing.
– Bhimraj v. Income Tax Commissioner 1955 (AP) 172
However, if put in writing it should clearly indicate, on the face of it, an intention to separate and holding of the divided shares as separate owners.
7. Registration of Partition Agreement
Oral partition recorded later by Memorandum of Partition does not need a registration under section 17 of the Registration Act, 1908.
In the matter of Popatlal Devaram v. CIT 77 ITR 1013, HELD :
“A partition of immovable properties of a Joint Hindu Family can be effected by an oral agreement irrespective of the value of the property. A Memorandum recording the fact of a partition which has already taken place is admissible in law even if it is not registered under the Indian Registration Act.”
8. Requirement of Memorandum
A document acknowledging a previous partition of HUF does not require registration. Further, such a document is admissible in evidence as a proof of partition.
A memorandum of partition is, however, essential as the revenue authorities would like to be satisfied that the subject matter if partition is being physically divided and will have to weigh both the documents as well as oral statements.
In the matter of Digambar Adhar Patil v. Devaram Girdhar Patil 1955 (4) IT (SC), HELD :
” Under the Hindu Law it is not necessary that the partition should be effectuated by a registered partition deed. Even a family arrangement is enough to effectuate the partition between coparceners and to confer right to separate share and enjoyment thereof.”
Memorandum of Partition – Requirement of Registration
9. Validity of Unequal Shares on partition.
“Not open to the Income-tax authority to consider a partial partition to be invalid on the ground that shares have not been equally divided and to refuse to recognise the same.”
– See Apoorva Shantilal Shah v. CIT 141 ITR 558 (SC)
Similar view has been reiterated in
Kantilal Trikamlal 105 ITR 92 (SC)
Mehsoos Chettiar 18 ITR 586 (Mad.)
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