COMMISSIONER OF WEALTH TAX ANDHRA PRADESH Vs. TATAVARTHI RAJAH AND SATYANARAYANA MURTHY
HIGH COURT OF ANDHRA PRADESH
COMMISSIONER OF WEALTH-TAX, ANDHRA PRADESH
TATAVARTHI RAJAH AND SATYANARAYANA MURTHY
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Jeevan Reddy, J. -
(1.) The question referred for our decision in this case under s. 27(3) of the W.T. Act, is : "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is justified in canceling the wealth-tax assessments for the years 1958-59, 1959-60 and 1960-61 ?"
(2.) It arises in the following circumstances : Sri T. Nagapotha Rao and his three sons, Sitarama Rao, Raja and Satyanarayana Murthy, constituted an HUF. Sitarama Rao pre-deceased his father in 1947 and Nagapotha Rao died in 1950. Some time after the death of Sitarama Rao, the eldest son, disputes arose between his widow, Smt. Raja Syamala, and other members of the family and, even during the lifetime of Nagapotha Rao, the father, Smt. Raja Syamala had issued notices to other members of the family asking for a partition, and for rendering of an account in respect of her share. On 7/04/1954. Smt. Raja Syamala filed a suit for partition, being O.S.No.47 of 1954 on the file of the learned Subordinate Judge, Tenali. A preliminary degree was passed in terms of a compromise entered into between the parties, Whereunder, pending the passing of the final degree, certain properties were tentative allotted to different members for their enjoyment. The final degree was passed on 16/03/1961, when all the properties were divided by metes and bounds between the several members of the family.
(3.) The HUF was an assessee under the I.T. Act. For the assessment year 1959-60, the assessee claimed that there was a partition on 1/04/1956, Whereunder the several members were allotted distinct properties for their enjoyment and that, therefore, an order under s. 25A of the I.T. Act, 1922, should be made declaring that there was a disruption of the HUF as on 1/04/1956, the date on which the compromise-memo was filed into court leading to the preliminary decree. This was rejected by the ITO as well as by the AAC and the Income-tax Appellate Tribunal, whereupon the matter was brought to this court in R. C. No. 27/1970. (Tatavarthi Raja & Satyanarayana Murthy v. CIT) : (See p. 451 (Appx.) infra) : A Bench of this court held that under s. 25A of the Indian I.T. Act, 1922, a mere division in status is not enough to claim its benefit and that, unless the properties are divided in definite portions, i.e., by metes and bounds, an order under that section cannot be made. It was observed that what happened on 1/04/1956, was also not a case of partial partition, but only a tentative arrangement. The Bench observed that, inasmuch as the final decree was passed only on 16/03/1961, whereunder definite properties were allotted to the share of each of the members, the partition can be said to have taken place only on that date.;
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