JAKKA DEVAYYA AND SONS Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THESE two referred cases arise from the same facts, and the assessee in both is the same. R.C. No. 1 of 1950 relates to the assessment for 1944-45, the accounting year being the year ending on 24-3-1944. In R.C. No. 1 of 1950 the question referred to us for decision by the Income-tax Appellate Tribunal is

(2.) THE family consisted of three brothers, Lakshminarayana, Krishnamurthi and Subbarao Subbarao was a minor. On 24-6-1942 an unregistered partition list was drawn up between the members, and the minor Subbarao was represented by the eldest brother and manager Lakshminarayana. THE family owned gold jewels, silverware, utensils, and furniture, houses and house sites and cloth business. On the date of this list Subbarao was unmarried. THE jewels, silverware and other movables were divided between the sharers, and they took separate possession of those properties which were divided. THEy did not however divide by metes and bounds the houses and house-sites, because as per the directions of their deceased father they had to make provision for their widowed sister, and the division of the dwelling houses and the sites would necessitate certain structural alterations for the convenient enjoyment of the sharers which they did not intend to carry out during the minority of Subbarao, especially as he was unmarried. THEy therefore decided to keep these properties jointly. As regards the cloth business in this document, an account of the business was taken after valuing the stock on hand, and a balance sheet was embodied in the document. Details with reference to the property which was kept in joint possession were given in Schedule D appended to the document. THE document contains a clear determination and an unambiguous declaration that the members decided to become separate and to divide the properties; only the physical division of the assets included in Schedule D was postponed to a later date.

(3.) IT is no doubt true that in the matter of partition under the first document of 1942 Lakshminarayana, the eldest brother, represented Subbarao. In the later document, the registered partnership deed of 1943, Subbarao was represented by his father-in-law. IT might be argued that as the minor was not represented by a lawful guardian, the partition was invalid. The two brothers Lakshminarayana and Krishnamurthi, were adults. On account of certain family reasons they decided to become separate. If two out of the three brothers cut themselves out from the family, the third brother remains divided. As pointed out by the Judicial Committee in --'Balkishendas v. Ramnarain Sahu', 30 Cal 738;