1. A few facts need to be noticed which have led to these two references. One Mathurbhai Mansukhram purchased two pieces of agricultural lands of S. Nos. 5 and 7 admeasuring 3 acres 5 gunthas and 1 acre 35 gunthas respectively, situate within the revenue limits of village Amraiwadi within the City of Ahmedabad. The corresponding area of the land was 24,200 sq. yards. The said Mathurbhai Mansukhram had two sons Govind and Vasudev. They constituted a joint family of Mathurdas Mansukhram. Govindbhai has four sons, namely, Kandarp, Sudhir, Pankaj and Pradeep and his wife, Ramaben. It appears that a partition of the Hindu undivided family (hereinafter referred to as 'the HUF') of Mathurabhai Mansukhram was effected on April 6, 1950, in the pursuance of which the aforesaid two pieces of land, inter alia, came to the share of Govindbhai. Since there was a smaller HUF of Govindbhai comprising of himself, his four sons and wife and the two pieces of land belonged to his smaller HUF. It appears further that out of the aforesaid land, a portion of land admeasuring labour 5,090 sq. yards was acquired by the Ahmedabad Municipality leaving to the joint family the remaining land admeasuring 19,110 sq. yards. It appears further that Govindbhai on behalf of the family entered into an agreement to sell the said remaining piece of land admeasuring 19,110 sq. yards at Rs. 14 per sq. yard for the aggregate amount of Rs. 2,67,540 to one Shri P.V.Patel by an agreement of sale September 25,1963. It appears further that consequent to the aforesaid agreement, Shri P. V. Patel in his turn agreed to sell on 22nd October, 1963, his rights under an agreement to Bapudas Amthalal & Company, which, again in its turn, agreed to sell its rights to Dhanijibhai Bhailalbhai by an agreement of November 19, 1966. It appears further that the said two prices of land admeasuring 19,110 sq. yards were divided in five plots, A to E, and were conveyed to three different parties by three different deeds of conveyance; the first was executed in favour of Udyog Kamdar Society for 6,703 sq. yards for Rs. 1,07,248 on September 12, 1966; the second deed of conveyance was in respect of the part of land admeasuring 6,884 sq. yards in favour of Umiyadevi Co-operative Housing Society for Rs. 96,326 by a deed of conveyance of April 27, 1967, and third was in respect of the remaining portion of land admeasuring 5,523 sq. yards for Rs. 77,322 in favour of Prakash Co-operative Housing Society under a deed of convevance of September 16, 1967. Meanwhile, it appears that there was a registered partition deed between the members of the HUF of Govindbhai executed on September 12, 1966 agreeing to divide the said land and for that matter the sale proceeds of the said land which Govindbhai had agreed t o sell to Shri P.V.Patel, which he sold to the aforesaid three societies. Each one of the members was given an 1/6th shares in the property which was agreed to be divided. It appears that in the course of assessment for the assessment years 1967-68 and 1968-69, a question arose relating to the aforesaid partial partition of land when Govindbhai made an application to the ITO under s. 171 of the I.T. Act, 1961, to record a finding regarding the partial partition between himself and the members of his family. The ITO, however, rejected the application on two grounds, (i) that the amount of Rs. 2,22,950 being 5/6th shares of the sale proceeds allotted to the other five members of the family of Govindbhai was in fact not paid as mentioned in the partition deed dated September 12, 1966, and (ii) that there was no partition as required by the Explanation to s. 171 of the I.T. Acts, 1961. It appears that the same claim was advanced in the course of assessment for the assessment year 1968-69 which for the same reasons was rejected by the ITO.
2. The assessee, therefore, carried the matter before the AAC, who was not impressed by the claim of the assessee and, therefore, confirmed the order of the ITO for both the assessment years. The assessee, therefore, carried the matter in further appeal by preferring two appeals in respect of two assessment years involved. The Tribunal allowed the appeals, since, in the opinion of the Tribunal, there was a valid partial partition inasmuch, since the parties did not consider it beneficial to actually divide the land into small pieces, they decided to allot the whole of the land to Govindbhai who agreed to pay Rs. 2,22,950, being the 5/6ths shares of the sale proceeds to the other members of the family. The Tribunal was, therefore,of the opinion that there was one of the modes adopted for partitioning the properties and merely because the whole of the land was allotted to one of the members of the family, it could not be said that there was no valid partition and that there was a sale as contended on behalf of the Department. the Tribunal also found that the amount of Rs. 2,22,950, which Govindbhai had agreed to pay under the said partition deed, was in fact paid to the different members as established from the different investments made by the respective members. The Tribunal, therefore, upheld the claim of the assessee that there was a valid partition effected in respect of the land in question.
3. At the instance of the Revenue, therefore, the following two questions have been referred to us for our opinion :
'1. Whether the Tribunal was right in holding that since the assessee was not assessed prior to the assessment year 1967-68, the provisions of section 171 had no application and it was not necessary to effect physical division of the lands in question
2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that there was a valid partition of the lands in question and consequently directing the Income-tax Officer to record a finding that the partition of the lands in question took place on September 12, 1966 ?'
4. It should also be simultaneously noted that consequent to the order of the ITO refusing to recognise and record the partition in the aforesaid assessment years 1967-68 and 1968-69, the income arising out of the sale for purposes of the capital gains was assessed in the hands of the HUF of Govindbhai. The assessee had preferred an appeal before the AAC, which was rejected. The Tribunal consequent to its order recognise the partial partition held that the capital gains arising out of the sale transaction in question were not taxable in the hands of the HUF. The Revenue, therefore, sought this reference which was accordingly granted by Income-tax Reference No. 93 of 1976, and 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 holding that since the partial partition in respect of the lands in question was treated as laid by the Tribunal, capital gains arising out of the sale transactions in question were not taxable in the hands of the assessee-HUF ?'
5. The answer to the second question in Income-tax Reference No. 117 of 1976 will be conclusive in the mater and will not require us to answer question No. 1 in Income-tax Reference No. 117 of 1976 and will also consequently decide the question referred to us in Income-tax Reference No. 93 of 1976.
6. We do not think that there is any justification for us to take any view other than what has been taken by the Tribunal on the construction of the partition deed in question. It is no doubt true that the parties did not effect a partition, by metes and bounds of the land in question and they decide to divide the sale proceeds of the land in question which Govindbhai had agreed to sell by his agreement of September 25, 1963, to Shri P.V.Patel. In our opinion, that was the only legitimate course which the parties could have adopted, inasmuch as the only right which the family had under the agreement provided it was carried to, was to receive the sale proceeds. The partition could have, therefore, been effected only of the sale proceeds which the family was to receive on a sale of the land in question. It is no doubt true that in the deed of partition the mode adopted was to transfer the entire land to Govindbhai and in consideration thereof Govindbhai agreed to pay to the five members of his family who were his wife and four sons, 5/6th of amount of the sale proceeds for which he agreed to sell the lands in question. The Tribunal was perfectly right when it opined that this was one of the modes of partitioning joint family property. The only contention which was urged on behalf of the Department against this transaction was that in effect and substance it amounted to a sale by the HUF to Shri Govindbhai. Now, the term 'sale' means the transfer of a property for a price, and partition is, on principle and authority, not a transfer of the property by is merely a change in the mode of enjoyment (vide CIT v. Keshavlal Lallubhai Patel : 55ITR637(SC) . Partition of joint Hindu family consists in ascertaining and defining the shares of the coparceners in the joint property and an actual division of the property by metes and bounds is not necessary to constitute a partition. The division of the said properties by mets and bounds may take place subsequently. Even their residing together after such partition and enjoying the properties jointly would not change the tenor of the properties and make them joint. Partition may be effected, inter alia, by agreement or conduct which evinces an intention to sever the status of the joint family. However, merely because one member of the family sever his relations, there is no presumption, as stated above, that there is a severance between the other members too. That question, whether there is a severance between the other members is one of facts to be determined on a consideration of all the attendant circumstances (vide Girijanandhani Devi v. Bijendra Narain Choudhari : 1SCR93 and Appovier v. Rama Subba Aiyan  11 MIA 75). The real test of an instrument of partition is whether there was any property of which the parties were co-owners which is divided by that deed in severalty. The instruments whereby the co-owners of any property divided or agree to divide it in severalty are instrument of partition (vide In re Govind Pandurang Kamat  ILR 35 Bom 75). The court may, upon a proper consideration of the deed, find whether the parties purport to be co-owners of the property or not, and the courts are only concerned with the construction of the terms of the document and not with the legality of the claim set up by one or other (vide West Punjab Govt. v. Gian Chand, AIR 1940 Lah 126 [SB]). On an application of these established principles, we have to determine whether the Tribunal was justified in concluding that the instrument in question was a deed of partition. All relevant tests, which would justify that conclusion, are satisfied. In the first instance, there was a property comprising of land, which on sale realised cash, being the amount of sale proceeds. The parties to the instrument were admittedly co-owners of the said property. They agreed to divide by that partition deed the said property in severalty. Their shares were ascertained and in anticipation of the realisation of the sale proceeds the manager, Govindbhai executed promissory notes of the respective amounts falling to the shares of the other members of the family, in pursuance of which, admittedly,the amounts were paid to each of them. In no case, it can be said that there was any transfer of property in the sense of the transaction being sale. It is, for all intents and purposes, a change in the mode of enjoyment. We, therefore, agree with the reasoning of the Tribunal for reaching the conclusion that the transaction in question by which the parties agreed to divide the sale proceeds of land, for purpose of effecting a partition of the land, was a valid partial partition of the property in question and, therefore, the ITO was bound to recognise and record it. We have, therefore, to answer question No. 2 of Income-tax Reference No. 117 of 1976 in the affirmative, that is, in favour of the assessee and against the Revenue.
Question No. 1, in Income-tax Reference No. 117 of 1976, therefore, need not be answered.
7. Consequently, we have also to answer the question referred to us in Income-tax Reference No. 93 of 1976 in the affirmative, that is, in favour of the assessee and against the Revenue.
8. The Commissioner shall pay costs of both these reference to the assessee.