(Judgment of the Court was delivered by the Honourable the Chief Justice.)
The assessee was the managing member of a joint Hindu family consisting of himself and his four brothers. On 15th October 1938, the brothers agreed to separate and on 22nd january 1941 a deed of partition was executed and registered. The family estate consisted of immovable and movable properties. On the 15th October, they divided the cash which they possessed and to each member was allotted a house. The other immovable property was also divided among the members on the date. On 25th December 1938 they divided the furniture and household utensils. The family had carried on a grocery business. The assets of this business were not divided until 24th February 1939. The assessee contended before the Income-tax authorities and the Income-tax Appellate Tribunal, Calcutta Bench, that for the purposes of Section 25A of the Income-tax Act the partition must be deemed to have take place on 15th October 1938. On the other hand, the Income-tax authorities maintained that the partition must be deemed to have taken place on the date when the deed was registered. The Appellate Tribunal concurred in this opinion. At the request of the assessee the Tribunal has referred to this Court the following question of law :-
'Whether the partition could be said to have taken place within the meaning of Section 25A on 15th October 1938 when the members began to live separately though all the properties were not divided.'
There is a distinction to be drawn between separation of status and partition of family property. As pointed out by the Privy Council in Sundar Singh Majithia v. Commissioner of Income-tax, Section 25A refers only to a partition of the property. If the Income-tax Officer is satisfied that the joint family property has been partitioned among the various members or groups of members in definite portions, he must record an order to that effect. On this being done, the members are assessed in accordance with the provisions of the section.
Partition means a completed partition. The fact that some assets are divided and others are left for division at the future date would not be partition within the meaning of the section. In this case important assets, namely, those of the business, were not divided until February 1939 and the Court has been informed that other assets still remain to be divided. In these circumstances it is clear that the date of the partition is not 15th October 1938, and that is that answer to give to the reference.
The Commissioner of Income-tax is entitle to his costs, Rs. 250.
Reference answered accordingly.