Section
171 of the Income Tax Act, 1961 defines the partition of HUF and deals with the
provisions of assessment after its partition.
What
is the Partition
Partition
is the severance of the status of Joint Hindu Family, known as Hindu Undivided
Family under tax laws. Under Hindu Law once the status of Hindu Family is put
to an end, there is notional division of properties among the members and the
joint ownership of property comes to an end. However, for an effective partition,
it is not necessary to divide the properties in metes and bounds. But under tax
laws for an effective partition division by metes and bounds is necessary.
Partition
means—
|
Case |
Partition |
|
Where
the property admits of a physical division |
a
physical division of the property, but a physical division of the income
without a physical division of the property producing the income shall not be
deemed to be a partition; or |
|
Where
the property does not admit of a physical division |
then
such division as the property admits of, but a mere severance of status shall
not be deemed to be a partition. |
An HUF
can be partitioned both as regards to persons and as regards to property. This
partition can be of two types: (a) Total or complete partition;
(b)
Partial partition.
The
Partition of HUF can be categorized as under:—
(i)
Partial Partition
Partition
could be partial also. It may be partial vis-à-vis members, where some of the
members go out on partition and other members continue to be the members of the
family. It may be partial vis-à-vis properties where, some of the properties
are divided among the members other properties continue to be HUF properties.
Partial partition may be partial vis-à-vis properties and members both.
However,
Tax Laws do not recognize partial partition of property or/ and persons after
30.03.1978 on insertion of sub-section (9) to Section 171 of the Income Tax
Act. This restriction was put to avoid creation of multiple HUFs which was a
misuse.
Tax
implication of Partial Partition of HUF
Section
171, as originally enacted, applied to total as well as partial partition.
However, sub-section (9) inserted by Finance (No 2) Act, 1980 recognises only
complete partition. A Partial partition took place after 31.12.1978 is not
recognized under the Income Tax Act, 1961 (Section 179(9). Thus partial
partition effected after this date is not given effect to by the Assessing
Officer even though such partition may be legal as per Hindu Law. Hence, for
the purpose of income-tax assessment, the HUF shall be deemed to continue
notwithstanding the partial partition and the income from all properties shall
continue to be assessed in the hands of erstwhile HUF. Therefore even after the
Partial partition, the income of the HUF shall be liable to be assessed under the
Income-tax Act as if no partition had taken place.
Treatment
in case of partial partition took place after 31.12.1978 [Section 171(9)]
Where a
partial partition has taken place among the members of an HUF after 31.12.1978,
then—
(i) no
claim that such partial partition has taken place shall be inquired into under
section 171(2)
(ii) no
finding regarding partition shall be recorded under section 171(3).
(iii)
such family shall continue to be liable to be assessed under this Act as if no
such partial partition had taken place;
(iv)
each member or group of members of such family immediately before such partial
partition and the family shall be jointly and severally liable for any tax,
penalty, interest, fine or other sum payable under this Act by the family.
KEY
NOTE
Liability
of any member or group of members aforesaid shall be computed according to the
portion of the joint family property allotted to him or it at such partial
partition.
Setting
apart of certain assets of HUF in favour of certain coparceners on a condition
that no further claim in properties will be made by them, is a partial
partition under Income Tax Act
Setting
apart of certain assets of HUF in favour of certain coparceners on the
condition that no further claim in properties will be made by them, isnothing
but a partial partition and not a family arrangement and not recognised in view
of section 171(9) of the Act.—[ITO v. P. Shankaraiah Yadav (2004) 91 ITD 228
(ITAT Hyderabad)]
(ii)
Total or Complete Partition
Assets
of HUF are physically divided. In total partition all the members cease to be
members of the HUF and all the properties cease to the properties belonging to
the said HUF.
Tax
Implication of Full Partition of HUF
After
the Partition, the assessment of HUF shall be made as per the provisions of
Section 171 of the Income Tax Act and order to be passed by the Assessing
Officer.
Person
entitled to share on partition
Following
persons can claim share on partition:
|
Case |
Persons
who can claim share on partition |
|
Any |
Coparceners |
|
Any |
A
child in the womb of his mother at the time of partition |
|
Partition
between sons after the death of father |
Mother
- gets an equal share to that of son |
|
Wife
- gets an equal share to that of a son (apart from that of husband) |
Partition
between father and sons |
KEY
NOTE
A
child in the womb of his mother is entitled to share of HUF property, on
partition.
How
a partition can be effected and what is its effect
To
constitute a partition all that is necessary is a definite and unequivocal
indication of intention by a member of a joint family to separate himself from
the family. What form such intimation indication or representation of such
interest should take would depend upon the circumstances of each case. A
further requirement is that this unequivocal indication of intention to
separate must be to the knowledge of the persons effected by such declaration.
A review of the decisions shows that this intention to separate may be
manifested in diverse ways. It may be by notice or by filing a suit.
Undoubtedly, indication or intimation must be to members of the joint family
likely to be affected by such a declaration.
Modes
of Partition
A
partition can be made by a definite, unambiguous declaration of intention by
any member to separate himself from the family. If this is done it would amount
to division of status whatever mode may be used. Partition may be effected:
(a) By
institution of suit;
(b) By
submitting the dispute as to division of the properties to arbitration;
(c) By
agreement to divide the property;
(d) By
conduct or by a demand for a share in the properties;
(e) By
metes and bounds.
Persons
entitled to claim partition
Partition
can only be claimed by a coparcener. But, when there is a partition of HUF, the
following persons are entitled to a share in the assets of the HUF:
(i) All
coparceners.
(ii)
Mother is entitled to a share equal to the share of a son in case of death of
the father.
(iii)
Wife gets a share equal to that of a son if a partition takes place between her
husband and his sons. She enjoys this share separately even from her husband.
(iv) A
son in the womb of the mother at the time of the partition.
Right
of minor to claim partition
A minor
can claim partition through his guardian.—[Apoorva Shantilal Shah v. CIT
(1983) 141 ITR 558 (SC)]
Physical
division by metes and bounds is necessary
Hindu
Law does not require division of joint family property physically or by metes
and bounds. However, partition as defined under Explanation to Section
171 of the Act means—
(i)
where the property admits of a physical division, a physical division of the
property, but a physical division of the income without a physical division of
the property producing the income shall not be deemed to be a partition; or
(ii)
where the property does not admit of a physical division, then such division as
the property admits of but a mere severance of status shall not be deemed to be
a partition).
There
should be physical partition of the property and not the notional partition
Therefore
a transaction can be recorded as a partition under section 171 only if, where
the property admits of a physical division, such division has actually taken
place.—[Kalloomal Tapeshwari Prasad (HUF) v. CIT (1982) 133 ITR 690 (SC)]
Concept
of notional partition is non-existent under the Income-tax Act
The
concept of notional partition is non-existent under the Income-tax Act. The
Income-tax Act recognizes only an actual partition and not the notional
partition.
Income-tax
Act recognizes only an actual partition and not the notional partition
When a Hindu
male dies on or after 17.06.1956 having at the time of his death an interest in
coparcenary property, leaving behind a female heir of the class one category, then his interest
in the coparcenary property shall devolve by succession and not by survivorship.
The interest of the deceased will be carved out over devolution, though there
is no actual partition. Such an act is considered as a notional partition under
the Hindu Law. The concept of notional partition is non-existent under the
Incometax Act. The Income-tax Act recognizes only an actual partition and not
the notional partition.
What
is notional partition
When a
Hindu male dies on or after 17.06.1956 having at the time of his death an
interest in coparcenary property, leaving behind a female heir of the class one
category, then his interest in the coparcenary property shall devolve by
succession and not by survivorship.The interest of the deceased will be carved
out over devolution, though there is no actual partition. Such an act is
considered as a notional partition under the Hindu Law.
Physical
division of property by way of book entries not permissible
Where a
property is capable of physical division, the partition must be made by
physical division only. If the property of the HUF does not admit of physical
division, the property must be so physically divided as much permits. For
example, it is not expected that the utility of the property is lost by
compelling a physical partition and in such a case, the property may be divided
physically to the extent possible.
This is
rule in section 179 to make a valid claim for recognising the partition for
Income-tax purposes.
Entries
showing division of the property in books of account may be good evidence of a
partition more particularly in cases where the property may not be capable of
physical division.
It was
held that the partition in the case of HUF can be effected orally and entries
in the books is the evidence of partition.—[CIT v. Shio Lingappa Shankarappa
and Brothers (1982) 135 ITR 375 (Bom)]
It has
been held that a business cannot be partitioned by metes and bounds. [R.B.
Bansidhar Dhandhania v. CIT (1944) 12 ITR 126 (Patna)] Therefore, where a
business of HUF was partitioned by well defined shares and partnership formed
was held valid.
Therefore,
where credit balances in capital account in books of firm in which assessee HUF
was a partner is partitioned, it was held that there was a valid partition.—[Motilal
Shyam Sunder v. CIT (1972) 849 ITR 186(All)]
An
asset which is not capable of physical division can be partitioned by making
entries in books.
It was
held that an asset which is not capable of physical division can be partitioned
by making entries in books. Here, entries relating to partition were passed in
books of HUF and not the partnership firm where HUF was a partner. The
partition was held valid.—[CIT v. K. G. Ramakrishnier (1963) 49 ITR 608
(Mad)]
Allotment
of share on partition
On a
partition between the members of a joint family, the shares are allotted as
under:—
|
S.
No. |
Particulars |
Allotment
of share on partition |
|
(i) |
On
a partition in an HUF which includes father, mother and sons, |
mother
has no right to claim partition but when a partition is actually effected she
takes a share equal to the sons. |
|
(ii) |
On
a partition between a father and his sons where mother is not living, |
each
son takes a share equal to that of the father. Suppose there are four sons,
each son will take 1/5 share of the property. |
|
(iii) |
If
joint family consists of brothers |
they
take equal shares on a partition. |
|
(iv) |
Each
branch takes per stripe as regards every other branch |
but
members of each branch take per capita as regards each other. |
|
(v) |
The
daughter whether married or unmarried |
With
effect from 09.09.2005, daughter married or unmarried whether shall also be
entitled to equal share on partition as she has also been treated as
coparcener like son. |
Difference
between partition under the Hindu Law and that under the Income-tax Act
There
is a difference between a partition under Hindu Law and a partition recognised
under the Income-tax Act. Though the concept of partition is the same under
Hindu law and tax laws, in two respects, recognition of partition under tax
laws differs from that under Hindu Law.
|
S.
No. |
Partition
under Hindu Law |
Partition
under section 171 of Income Tax Act, 1961 |
|
1. |
Partition
is a process by which a joint enjoyment is transformed into an enjoyment in
severalty. Each one of sharers had an antecedent title and therefore no
conveyance is required. CED v. Kantilal Trikamlal(1976) 105 ITR 92 (SC). |
Section
171 raises a legal fiction that an HUF, once assessed shall be deemed to
continue unless a finding of partition has been given under this section. Consequently,
unless a finding is recorded under section 171 that a partition has taken place, the income
from the properties would be included in the total income of the family by
virtue of sub-section (1) of section 171. (Kaloomal Tapeshwari Prasad v.
CIT (1982) 133 ITR 690 (SC) |
|
2. |
FOR
RECOGNITION OF PARTITION UNDER HINDU LAW DIVISION OF PROPERTIES BY METES AND
BOUNDS IS NECESSARY The
Hindu Law does not require that the property in every case be partitioned by
metes and bounds or physically into different portions to complete a
partition. In
other words, for recognition of partition under Hindu Law division of
properties by metes division of properties by metes and bounds is not
necessary. Once shares of each share holder are defined, the partition is
complete. It is not necessary that it should be by metes and bounds. |
HOWEVER,
FOR RECOGNITION OF PARTITION UNDER TAX LAWS, DIVISION OF PROPERTIES BY METES
AND BOUNDS IS NOT NECESSARY The Income
Tax Law introduced certain additional conditions of its own to give effect to
the partition under section 171. For recognition of partition under tax laws,
division of properties by metes and bounds is necessary. It
was held that where the assets were not divided by metes and bounds, the
partition could not be recognised for the purposes of the Income-tax Act. [CIT
v. Venugopal Inani (1999) 239 ITR514(SC)] |
|
3. |
Even
a single coparcener can separate himself from rest of the family. |
It
is to be noted that section 171 applies to those HUFs which have been
assessed under the Act. So, in my opinion, partial partition can still take
place where HUF has not been assessed without invoking this section. |
|
4. |
UNDER
HINDU LAW PARTIAL PARTITION IS RECOGNISED Partition under Hindu Law, can be
total or partial. In total partition all the members cease to be members of
the HUF and all the properties cease to be properties belonging to the said
HUF. For example, joint family business could be divided while retaining
other properties as joint property. |
However,
in view of provisions of Section 171(9) of Income-tax Act, 1961, partial
partitions will not be recognised for tax purposes. Section 171, as
applicable from assessment year 1980-81, recognises only complete partition. Explanation
to this section recognizes only partition by metes and bounds i.e. the
physical division of property is condition precedent. So, there is a departure
from Hindu law. Even a decree of court would not be sufficient or binding on
Assessing Officer unless physical division takes place. ITO v. N K Sarada
Thamptty (1991) 187 ITR 696 (SC); Narender Modi v. CIT (1976) 105 ITR 109
(SC). |
|
5. |
Where
there is partition between different branches, the respective branches
continue to remain in joint. |
Partition
can be effected on demand of coparceners or suo moto by the father in
his superior power even without the consent of sons. Such right can also be
exercised even where sons are minors. Apoorva Shantilal Shah (HUF) Seth
Gopaldas (HUF) v. CIT (1983) 141 ITR 558 (SC). |
|
6. |
Since
partition can be effected between coparceners only, a family with sole
coparcener is not amenable to partition. V. V. S. Natarajan v. CIT111 ITR
539 (Mad); CIT v. Satpal Bansal 162 ITR 582 (P&H)(FB) |
In
case of CIT v. Maharani Rajlaxmi Devi224 ITR 582 SC, the court has
held that recording of partition under section 171 is necessary even in case
is falling under section 6 of the Hindu Succession Act. It observed: “it must
be held that though for the purpose of HUF, section 6 of the Hindu Succession
Act, would govern the rights of the parties but insofar as income-tax law is
concerned, the matter has to be governed by section 171(1).” |
|
7. |
|
It
is mandatory that assessee must make a claim of partition at the time of
making assessment under section 143/144. If such claim is made, the Assessing
Officer is required to make an enquiry
into such claim after giving notice to all the members. After making enquiry,
Assessing Officer is required to record a finding accepting/rejecting the
claim. |
The
Partition of HUF should be recognized as per the Income Tax Act and not as per
the Hindu Law. Section 6 of the Hindu Succession Act would govern the rights of
the parties but insofar as income-tax law is concerned, the matter has to be
governed by section 171(1) of the Income Tax Act, 1961 —[Add. CIT v.
Maharani Raj Laxmi Devi (1997) 91 Taxman 20 (SC)]
Where
however, division was not effected of the property the claim was rejected—[Kaluram
& Co. v. CIT (2002) 254 ITR 307 (2001) 115 Taxman 499 (Del)]
As per Kalwa
Devadattam v. UOI, even where there is complete partition by metes and
bounds the family will be deemed to continue (i) if no claim of partition is
made by the members at the time of the assessment; or (ii) if a claim is made
but no finding is given by the officer recording the partition.—[Kalwa
Devadattam v. UOI (1963) 49 ITR 165 (SC)]
Section
6: The Hindu Succession (Amendment Act),
2005 which came into effect on 09.09.2015 and by which daughters in a joint
Hindu family, governed by Mitakshara law, were granted statutory right in the
coparcenary property (being property not partitioned or alienated) of their
fathers applies only if both the father and the daughter are alive on the date
of commencement of the Amendment Act.
(i) An
amendment of a substantive provision is always prospective unless either
expressly or by necessary intendment it is retrospective. In the present case,
there is neither any express provision for giving retrospective effect to the
amended provision nor necessary intendment to that effect. Requirement of
partition being registered can have no application to statutory notional
partition on opening of succession as per unamended provision, having regard to
nature of such partition which is by operation of law. The intent and effect of
the Amendment will be considered a little later. On this finding, the view of
the High Court cannot be sustained.
(ii)
Contention of the respondents that the Amendment should be read as
retrospective being a piece of social legislation cannot be accepted. Even a
social legislation cannot be given retrospective effect unless so provided for
or so intended by the legislature. In the present case, the legislature has
expressly made the Amendment applicable on and from its commencement and only
if death of the coparcener in question is after the Amendment. Thus, no other
interpretation is possible in view of express language of the statute. The
proviso keeping dispositions or alienations or partitions prior to 20th
December, 2004 unaffected can also not lead to the inference that the daughter
could be a coparcener prior to the commencement of the Act. The proviso only
means that the transactions not covered thereby will not affect the extent of
coparcenary property which may be available when the main provision is
applicable. Similarly, Explanation has to be read harmoniously with the
substantive provision of Section 6(5) by being limited to a transaction of
partition effected after 20th December, 2004. Notional partition, by its very
nature, is not covered either under proviso or under sub-section (5) or under
the Explanation.
(iii)
Interpretation of a provision depends on the text and the context (RBI v.
Peerless (1987) 1 SCC 424, para 33). Normal rule is to read the words of a
statute in ordinary sense. In case of ambiguity, rational meaning has to be
given (Kehar Singh v. State (1988) 3 SCC 609). In case of apparent
conflict, harmonious meaning to advance the object and intention of legislature
has to be given (District Mining Officer vs. Tata Iron and Steel Co. (2001)
7 SCC 358).
(iv)
There have been number of occasions when a proviso or an explanation came up
for interpretation. Depending on the text, context and the purpose, different
rules of interpretation have been applied (S. Sundaram Pillai v. R.
Pattabiraman (1985) 1 SCC 591).
(v)
Normal rule is that a proviso excepts something out of the enactment which
would otherwise be within the purview of the enactment but if the text, context
or purpose so requires a different rule may apply. Similarly, an explanation is
to explain the meaning of words of the section but if the language or purpose
so requires, the explanation can be so interpreted. Rules of interpretation of
statutes are useful servants but difficult masters (Keshavji Ravji & Co.
vs. CIT (1990) 2 SCC 231). Object of interpretation is to discover the
intention of legislature.
(vi) In
this background, we find that the proviso to Section 6(1) and sub-section (5)
of Section 6 clearly intend to exclude the transactions referred to therein
which may have taken place prior to 20th December, 2004 on which date the Bill
was introduced. Explanation cannot
permit reopening of partitions which were valid when effected. Object of giving
finality to transactions prior to 20th December, 2004 is not to make the main
provision retrospective in any manner. The object is that by fake transactions
available property at the introduction of the Bill is not taken away and remains
available as and when right conferred by the statute becomes available and is
to be enforced. Main provision of the Amendment in Section 6(1) and (3) is not
in any manner intended to be affected but strengthened in this way. Settled
principles governing such transactions relied upon by the appellants are not
intended to be done away with for period prior to 20th December, 2004. In no
case statutory notional partition even after 20th December, 2004 could be
covered by the Explanation or the proviso in question.
(vii)
Accordingly, we hold that the rights under the amendment are applicable to
living daughters of living coparceners as on 9th September, 2005
irrespective of when such daughters are born. Disposition or alienation
including partitions which may have taken place before 20th December, 2004 as
per law applicable prior to the said date will remain unaffected. Any
transaction of partition effected thereafter will be governed by the Explanation.
—[Prakash v. Phulvati - Civil Appeal No. 7217 of 2013, dated 24.11.2015
(SC)]
SLP dismissed against ruling that where assessee-company
waived off its right to receive sale consideration of a property jointly held
by its director with other family members in order to avoid deadlock in
management of company on account of any disputes arising between family members
who were also its shareholders, in view of fact that an order to that effect
was passed under section 171 and, moreover, amount was duly written off in
books of account, assessee’s claim for deduction of said amount as bad debts
was to be allowed
Assessee was a private limited
company consisting of two directors - Even though there was a partition effected
between brothers of one of directors, other brothers were demanding a share in
properties - One of such properties, standing in name of director was purchased
by assessee-company - Entire property was divided into three blocks - First two
blocks were reserved for sale to outsiders, whereas third block was sold to
members of Hindu Undivided Family (HUF) of director - Subsequently, a family settlement arrangement was arrived
between members of HUF and company and it was decided therein that assessee would waive
right to recover dues of sale consideration - According to assessee, said
decision was taken in order to avoid future deadlock in management of company
on account of any disputes arising between family members who were also its
shareholders - An order was also passed under section 171 - Assessee filed its
return claiming sale consideration waived off as bad debt - Assessing Officer
opined that mere possibility that there could be future
disputes/quarrels/differences between members of HUF, could not constitute a ground to
hold that amount in question was bad debts - He, thus, rejected assessee’s claim
- Tribunal, however, allowed claim raised by assessee - High Court by impugned
order held that, on facts, revenue could not contest assessee’s claim even
after passing of order under section 171 and, further, even otherwise, since
only requirement of law was that amount should have been written off in books
of account of assessee which was admittedly done, Tribunal was justified in
allowing assessee’s claim - Special Leave Petition filed against impugned order
was to be dismissed [In favour of assessee] (Related Assessment years : 2003-04
and 2004-05) – [CIT v. Millennia
Developers (P) Ltd. (2019) 266 Taxman 186 : 109 taxmann.com 94 (SC)]
Family
business can be partitioned by making necessary entries of division of capital
of the family
The
family business can be partitioned by making necessary entries of division of
capital of the family. Such division must, of course, be effective so as to
bind the members. For an asset like family business or share in partnership,
there cannot be said to be any other mode of partition open to the parties if
they wish to retain the property and yet hold it not jointly but in severalty
and the law does not contemplate that a person should do the impossible.—[Chandas
Haridas and another v. CIT (1960) 39 ITR 202 (SC)]
It is
also open to parties to allot whole house to one member on his undertaking to
pay money value of the shares due to other members & the amount paid to
other coparcenes will be available to the members in addition to his cost of
his share if the house is later sold.—[Lalitaben Hariprasad v. CIT (2009)
180 Taxman 213 : 224 CTR 306, 320 ITR 698(Guj).
Validity
of partition between widow-mother and sole surviving coparcener-son
A wife
or mother has no right to claim partition, but if a partition is effected a
mother or the wife gets a share equal to that of the son.
The
property which devolves on a Hindu under section 8 of the Hindu Succession Act
would be individual property. Thus individual property shall continue to be
individual property on inheritance and HUF property on partition shall be that
of the joint Hindu family subject to the existence of family during the
relevant assessment year (Refer CWT v. Chander Sen (1986) 161 ITR 370(SC);
CIT v. P.L Karuppan Chettiar (1992) 197 ITR 646(SC).
Ownership
of Property received by a member on a total partition of HUF
The
property received by male member on total partition will retain its character
as a joint family property. If he is single, it will be HUF property on the
marriage.—[CIT v. Arun Kumar Jhunjhunwala and Sons (1997) 223 ITR 45 (Gau)]
Partition
on death of coparcener
A
partition is an act effected inter vivos between the parties agreeing to
the partition. A death of partner cannot bring about an automatic partition and
on such a death, the other surviving members continue to remain joint. However,
under the provisions of Hindu Succession Act, 1956, there is a deemed partition
for a limited purpose of determining the share of the deceased coparcener for
the purpose of succession under the Act.
Procedures
for recognition of partition
The
procedure by which the partition gets its recognition are as follows:—
(a) The
HUF, which has been hitherto assessed, must make a claim to the assessing
officer that the Hindu undivided family (HUF) properties have been subjected to
total partition.
(b)
Then, the Assessing Officer will make an inquiry into the claim after giving
notice to all members of the HUF; and
(c) if
he is satisfied that the claim is correct, then, he will record a finding that
there was a total partition of the HUF, and he will also mention the date on
which it has taken place.
No
necessity of other coparceners to agree in order to entitle a coparcener to
claim for a partition
It is
not necessary that other coparceners should agree to the partition sought by
one of the coparceners.
But
merely because one member severs his relations with others there is no
severance between others.—[CIT v. Govindlal Mathurbhai Oza (1982) 138 ITR
711 (Guj)]
There
can be an oral partition
It is
not necessary to effect partition by a written partition deed. It can be
effected orally and be acted upon. Even a partition of an immovable property
can be by an oral agreement.—[Popatlal Devram v. CIT (1970) 77 ITR 1073
(Orissa); Padam Lochan v. State of Orissa (1972) 84 ITR 88 (Orissa)]
What
shall be the nature of the property received on partition?
The
nature of the joint family property on partition shall be as that of joint
family property as and when the recipient person is married. Hence the
character of the property shall remain that of the joint family property.
Such
property shall be assessed as individual property, as long as the recipient is
unmarried or is reduced to a single person.
No co-coparcener (son) has a
right to challenge the sale made by the Karta of his family
Once the factum of existence of
legal necessity stood proved, then, in our view, no co-coparcener (son) has a
right to challenge the sale made by the Karta of his family. The plaintiff
being a son was one of the co-coparceners along with his father-Pritam Singh.
He had no right to challenge such sale in the light of findings of legal
necessity being recorded against him. It was more so when the plaintiff failed
to prove by any evidence that there was no legal necessity for sale of the suit
land or that the evidence adduced by the defendants to prove the factum of
existence of legal necessity was either insufficient or irrelevant or no
evidence at all.—[Kehar Singh (D) Thr. L.Rs. & Ors. v. Nachittar Kaur
& Ors. - Date of Judgement : 20.08.2018 (SC)]
Partition does not give a coparcener a title or create a title in him, it only enables him to obtain what is his own in a definite and specific form for purposes of disposition independent of the wishes of his formal co-shares .—[Girija Bhai v. Sadha Shiv Dund Raj AIR 1916 PC 104]
On partition of HUF which had considerable movable and
immovable properties, assessee got several properties apart from one-third
share in ‘S’ property which was allegedly received in pursuance of a consent
decree creating a charge on property for payment of Rs. 10 lakhs to his
unmarried daughter ‘N’ for her education, maintenance and marriage expenses -
During relevant assessment year, part of ‘S’ property was sold by assessee -
Out of sale consideration, he deducted an amount of Rs. 10 lakhs and offered
capital gain on remaining amount - Assessing Officer disallowed claim holding
that amount paid to ‘N’ was not diversion of income but application of income
for discharging assessee’s obligation - Whether in terms of section 48, payment
made by assessee for education, maintenance and marriage of his unmarried
daughter, though under consent decree, could be said to be an expenditure
wholly and exclusively incurred in connection with transfer of property or
could be considered as a cost of acquisition or cost of improvement - Held, no
During the relevant assessment year,
the assessee had sold a part of ‘S’ property. Out of the sale consideration, he
deducted a sum of Rs. 10 lakhs which was paid to his unmarried daughter ‘N’ and
the long-term capital gain was offered on balance amount. The assessee
explained that the said property was received by him on partition of
his HUF and in terms of a consent decree passed by the civil court, a
charge was created on said property for payment of Rs. 10 lakhs to ‘N’ for her
education, maintenance and marriage expenses of ‘N’, and that the buyer of the
property had directly paid the said sum to ‘N’. The assessee claimed that the
payment made to ‘N’; was allowable while computing capital gain either as an
element of cost or as a deduction from gross sale consideration. The Assessing
Officer observed that the assessee, by adopting that method, had created a
device so as to give it a colour of ‘charge’ on the property to show it as
diversion of income by overriding title. According to the Assessing Officer,
there was no real dispute between the family members for going to the civil
court, and the ‘so-called charge’ was created by mutual agreement. The
Assessing Officer held that maintenance paid to wife and children under consent
decree could not be considered to be charge on the property and, thus, amount
paid was not diversion at source, but application of money to discharge an
obligation and, therefore, he disallowed the assessee’s claim and charged the
long-term capital gains on the entire sale consideration received in regard to
the said property. On appeal, the Commissioner (Appeals) upheld the
disallowance. On second appeal :
Held : The
erstwhile HUF of the assessee was having considerable movable and
immovable properties and the assessee did not get only the property which was
made subject to payment of Rs. 10 lakhs, but also had got several other
properties apart from receiving one-third share in ‘S’ property.
At the
time of executing the sale agreement, the assessee was absolute owner of
one-third of ‘S’ property in terms of award approved by the civil court. Thus,
at the time of sale agreement, the assessee was full owner of the property on
which capital gain had arisen to him. It was only in the consent terms, that
the said property was made subject to payment of Rs. 10 lakhs. Under the Hindu
Law, as it was prevalent at the relevant time, unmarried daughter did not have
right to partition, but had a right to education, maintenance and marriage
out of HUF property. In the award, provision of Rs. 5 lakhs was made
for the purpose of education, maintenance and marriage of ‘N’ apart from share
in jewellery, etc., and there was no mention in the said award regarding charge
created only in respect of ‘S’ property falling to the share of the assessee.
Rs. 5 lakhs was a charge on all the properties and not specifically in respect
of share of the assessee in respect of property. In the consent terms, there
was no material change other than that the provision of Rs. 5 lakhs was enhanced
to Rs. 10 lakhs and it was specifically mentioned that said sum of Rs. 10 lakhs
would be a charge on the share received by the assessee with regard to
property. Consent terms had been managed to get a deduction of Rs. 10 lakhs out
of sale price of property which was already under sale agreement.
The claim
of the assessee for deduction of said sum of Rs. 10 lakhs had to be examined
under specific statutory provisions relating to the taxation of capital gains.
Section 48 carries the marginal note, ‘Mode of computation & deduction’ and
this section contains the only provision for allowance of deduction, in the
computation of capital gains. Clause (i) of this section provides for deduction of
expenditure incurred wholly and exclusively in connection with the transfer of
the capital asset. Clause (ii)
requires that the cost of acquisition of the capital asset as well as cost of
any improvement to the capital asset, must be deducted in order to arrive at
the capital gain. Thus, these two clauses deal with the amount to be deducted
in order to arrive at capital gains. Apart from these two clauses in section
48, there is no other provision in the Act which permits deduction of any kind
in computation of capital gain. Thus, mere liability or an obligation to discharge
the obligation of education, maintenance and marriage cannot be regarded as an
item of expenditure let alone an expenditure wholly and exclusively in
connection with the sale of property. At the time when sale agreement was
executed, there was no provision in the award regarding a charge created
specifically on ‘S’ property falling to the share of the assessee and it was
later development that by consent terms, a so-called charge was created. Thus,
it could not be said that the payment of Rs. 10 lakhs was an expenditure wholly
and exclusively incurred in connection with transfer of property sold and the
said payment could not also be considered as a cost of acquisition or cost of
improvement. Thus, the claim of the assessee was not in accordance with law.
Secondly,
even as per the case of the assessee, the share falling to him of ‘S’ property
was charged by a sum of Rs. 10 lakhs. The assessee had not sold his entire
share in ‘S’ property. Thus, the claim of the assessee was not even supported
by consent decree as substantial part of said property was still with the
assessee, which was also subject to charge. Thus, it could not be accepted that
the property sold by the assessee only was subject to charge of Rs. 10 lakhs
and, therefore, the amount of Rs. 10 lakhs should be deducted out of
computation of capital gains in the hands of the assessee.
Further, HUF of
the assessee was completelypartitioned by award dated 4-9-1990 which
had become final on passing civil decree. The said decree was challenged by ‘N’
by filing a civil suit. Said ‘N’ was minor at the time
of partition effected by the above award. Thus, it was an attempt to
reopen the partition at the instance of the minor whose interest was
taken into care in the award itself by providing Rs. 5 lakhs and share in
jewellery. In the award, the said amount of Rs. 5 lakhs was not specifically
mentioned to be a charge only on property falling to the share of the assessee.
According to provisions of section 339A as mentioned at page 465 of ‘Principles
of Hindu Law’ completedpartition could only be reopened if it is
proved to be unjust, unfair and to detriment of the interest of minor. It had
not been proved at any stage that the said partition done by the
award was unjust, unfair or to detriment of the interest of minor ‘N’, as there
was no such finding recorded by the Court for setting aside its award. It was
only by the consent term, that the amount of Rs. 5 lakhs was enhanced to Rs. 10
lakhs. Therefore, also the claim of the assessee could not be supported by
subsequent order of civil court recording consent term as a decree.
The
obligation of education, maintenance and marriage of unmarried daughter was on
the entire property of the HUF of which total partition was
being effected. By the act of parties, the obligation could not be fastened
only to a part of a particular property falling to the share of coparcener and
more particularly when said property, which was made a subject to so-called
‘charge’, was shared by all the parties to the partition. The mere fact
that the word ‘charge’ was recited in the decree would not establish that the
amount was a charge against the share in particular property of the assessee,
as it appeared that the said word ‘charge’ was intentionally used for an
ulterior purpose and was only a self-serving statement. In view of the above,
the claim of the assessee had rightly been rejected by the Assessing Officer as
well as by the Commissioner whose order was to the upheld. (Related Assessment year : 1994-95) - [Krishnadas
G. Parikh v. DCIT(Assessment), Special range, Ahmedabad (2008) 114 ITD 362 (2007)
112 TTJ 634 (ITAT Ahmedabad)]
In order to be acceptable or recognizable partition under section 171, a partition should be complete partition with respect to all members of HUF and in respect of all properties of HUF and also there should be actual division of property as per defined/specified shares allotted to each individual member of HUF property
A
valid partition,
recognizable/acceptable under section 171, has to be a severance in respect of
all members/coparceners of HUF as
also in respect of all properties of HUF and
if some of members remain joint or some of properties remain joint, then such
a partition will be only a
'partial partition' as provided in
Explanation (b) and will not be accepted or recognised as partition under section 171 and HUF will continue to be assessed in
status of HUF as provided in
section 171 (1). Further in order to be valid partition under section 171, there
should be actual physical division of property as per defined/specified shares
allotted to each individual member out of HUF property and if under an
alleged partition of HUF property, shares of individual
members in property are only defined or specified but actual physical division
or division by metes and bounds of property does not take place, then no partition, acceptable/recognizable under Act,
can be said to have been effected. Expression ‘physical division of property by
metes and bounds’, in context of partition of HUF, means that there should be actual
physical division of property as per defined/specified shares allotted to each
member of HUF under partition, if that property admits of such
physical division and if property is of such nature that it does not admit of
such physical division, then such division as property admits of. One M, who
was karta of HUF expired in
1954 leaving behind his two sons B and R and widow ‘T’ and his property
devolved upon B, R and T in equal shares. B became karta of HUF. After death of T, in a partition suit, properties except
property at Bombay were divided among members by metes and bounds and accepted
by all members. Further, dispute arose when R wanted to sell his undivided
share in aforesaid property. On reference, arbitrator gave his award directing
release of title of property to one H for consideration payable to each of
coparceners. H sold aforesaid property which was accepted by department under
section 269UL and sale proceeds were divided among coparceners in terms of
award. Assessee - HUF filed an
application under section 171. There was complete/total partition of assessee-HUF when arbitrator had given his award
and same should be accepted under section 171. (Related Assessment year :
1997-98) - [Mohanlal K. Shah, HUF v. ITO
(2005) 96 ITD 9 : 1 SOT 316 (ITAT Mumbai)]
Karta of a HUF can give effect to partial partition of joint family properties
between himself and his minor son
During the course of assessment proceedings the assessee HUF claimed that a partial partition took place in respect of its
share in the capital of a firm. The ITO observed that since a minor son was not
in a position to give consent and his wife was not a coparcener competent to
claim partition under the
Hindu Law, no partial partition could
be effected amongst the karta, his wife and his minor son and, accordingly,
rejected the claim of partial partition.
On appeal, the Commissioner upheld the orders of ITO. However on further appeal
the Tribunal upheld the claim of the assessee and granted approval to the
partial partition claimed by
it. On reference :
Held : In the decision of Apoorva Shantilal Shah v. CIT (1983) 141 ITR 558 : 13 Taxman 1 (SC)
it was held that a partial partition of properties brought about by the father
between himself and his minor sons cannot be said to be invalid under the Hindu
Law and must be held to be valid and binding. Therefore, right of the father to
effect partial partition of joint family properties between himself and his
minor sons, whether in exercise of his superior right as father or in exercise
of the right as patria potestas has necessarily to be exercised bona fide by
the father and is subject to the right of the sons to challenge the partition
if the partition is not fair and just. Therefore, the reference was answered in
favour of assessee and against the revenue. (Related Assessment year : 1977-78) – [CIT
v. Dharam Prakash HUF (2004) 191 CTR 526 :
(2005) 142 Taxman 420 (All.)]
The court has decided that setting apart certain
assets of an HUF in favour of certain coparceners on the conditions that they
will not made any claim in the property of the HUF is a partial division of
properties of HUF and assessing officer may ignore the partition according to
the provisions of Section 171(9) of the Income Tax Act, 1961. – [ITO v. P. Shankaraiah Yadav (2004) 91 ITD 288 (ITAT Hyderabad)]
Order
under section 171 not required where an HUF has not been assessed to tax
The
wordings of section 171 show that the section has no application to an HUF,
which has not been hitherto assessed. The authorities in support of this
proposition are :—[Addl. CIT v. Durgamma (P) (1987) 166 ITR 776 (AP); CIT v.
Hari Krishnan Gupta (2001) 117 Taxman 214 (Del)]
Section 171 does not recognise a partition even if it was effected by a decree of court
unless there is a physical division of properties by metes and bounds
The
definition of partition given in Explanation to section 171 does not recognise
a partition even if it is effected by a decree of court unless there is a
physical division of the property and if the property is not capable of being
physically divided then there should be division of the property to the extent
it is possible. Otherwise the severance of status will not amount to partition.
In considering the factum of partition for the purposes of assessment it is not
permissible to ignore the special meaning assigned to partition under the
Explanation, even if the partition is effected through a decree of the Court.
Ordinarily decree of a civil court in a partition suit is good evidence in
proof of partition but under section 171 a legal fiction has been introduced
according to which a preliminary decree of partition is not enough, instead
there should be actual physical division of the property pursuant to final
decree, by metes and bounds. The Legislature has assigned special meaning to
partition under the aforesaid Explanation with a view to safeguard the interest
of the revenue. Any assessee claiming partition of a HUF must prove the
disruption of the status of a HUF in accordance with the provisions of section
171 having special regard to the Explanation. The assessee must prove that a
partition effected by agreement or through court's decree, was followed by
actual physical division of the property. In the absence of such proof
partition is not sufficient to disrupt the status of a HUF for the purpose of
assessment of tax.
Under
the Hindu law members of a joint family may agree to partition of the joint
family property by private settlement, agreement, arbitration or through
court's decree. Members of the family may also agree to share the income from
the property according to their respective share. In all such eventualities
joint status of family may be disrupted but such disruption of family status is
not recognised by the Legislature for purposes of income-tax. Section 171 and
the Explanation to it, prescribes a special meaning to partition which is
different from the general principles of Hindu law. It contains a deeming
provision under which partition of the property of a HUF is accepted only if
there has been actual physical division of the property. In the absence of any
such proof, the HUF shall be deemed to continue for the purpose of assessment
of tax. Any agreement between the members of the joint family effecting
partition, or a decree of the Court for partition cannot terminate the status
of HUF unless it is shown that the joint family property was physically divided
in accordance with the agreement or decree of the Court.
In
the instant case, there was no dispute that prior to the assessment year
1967-68 the assessment was made against the HUF of which the respondent was a
member. The assessee for the first time raised the plea of partition and
disruption of HUF in the proceedings for the assessment years 1967-68 to
1969-70. There was no dispute before the ITO that there had been no physical
division of the properties by metes and bounds. Therefore, the ITO was
justified in holding that the status of a HUF had not been disrupted and the
income derived from the properties for the purposes of assessment continued to
be impressed with the HUF character. The High Court committed an error in
quashing the order of the ITO. In the result, the order of the High Court was
set aside. Decision of Kerala High Court reversed. (Related Assessment years : 1967-68 to 1969-70) – [ITO v. Smt. N.K. Sarada Thampatty (1991)
187 ITR 696 : (1990) 53 Taxman 78 (SC)]
In view
of the unit of ownership and community of interest of all coparceners in a
joint Hindu family business the position on partition of the joint Hindu family
business, whether it be partial or complete, is very similar in law to the
position on dissolution of a partnership firm. On partition the shares of the
coparceners in the joint family business become defined and their community of
interests is separated. Division of assets is a matter of mutual adjustment of
accounts as in the case of a dissolved partnership firm. The property which so
comes to the share of the coparcener, therefore, cannot be considered as
transfer by the joint family to a coparcener or the extinguishment of the right
of the joint family in that property, the joint family not having its own
separate interest in that property which can be transferred.—[CIT v. S.
Balasubramanian (1988) 230 ITR 934 (SC)]
Assessing
Officer bound to take decision on application for partition
It was
held that the Assessing Officer cannot continue to make assessment on HUF
without disposal of the application made for partition. If such assessment is
done, it shall not be valid and it has to be set aside so that assessment can
be made in conformity with the order under section 171 which the Assessing
Officer is bound to pass in accordance with law.— [Kapurchand Shrimal v CIT
(1981) 131 ITR 451 (SC)]
Where deed of partition showed
that property belonging to assessee - HUF had
been partitioned between
members of family, income from such property could not be assessed in hands
of HUF
One ‘G’ died in 1943 leaving behind his wife 'R' and
four sons. 'R' purchased a plot of land in her own name as stated in the
statement of the case. After the said purchase, a five-storeyed building was
erected on the said land. The assessee had been assessed in the status of
a HUF and in course of such assessment as it was contended on its
behalf that the family was divided, the ITO issued notices to the members and
they submitted that there had been a completepartition of the joint
family and the property had been partitioned by metes and bounds.
However, the ITO held that the said property was
not partitioned by metes and bounds and accordingly he assessed the
income of said property in the hands of the HUF. On appeal, the AAC
deleted the addition. The Tribunal affirmed the AAC’s order. On reference :
Held : The deed
of partition annexed to the statement of case conclusively showed
that property in question had been partitioned between the members of
the family. Therefore, it could be concluded that the income from the property
in question could not be assessed in the hands of the HUF. [In favour of
assessee] (Related Assessment year : 1961-62) – [CIT v. Narayan Chandra Dey (1977)
108 ITR 515 (Cal.)]
The
partition does not effect any transfer as generally understood in the Transfer
of Property Act.—[CIT v. N.S. Jetty Chettiar (1971) 82 ITR 599 (SC)]
There
can be an unequal partition
It is
at the sweet will of the co-parceners and members as to whether to allot on
partition in accordance with the share specified under the Hindu Succession Act
or to allot lower or more to anyone or more persons. The partition in the
family could not be considered to be a disposition conveyance, assignment, settlement,
delivery, payment or other alienation of property. A member of a Hindu
undivided family has no definite share in the family property before division
and he cannot be said to diminish directly or indirectly the value of his
property or to increase the value of the property of any other coparcener by
agreeing to take a share lesser than what he would have got if he would have
gone to a court to enforce his claim.—[CGT v. N. S. Getti Chettiar (1971) 82
ITR 599 (SC)]
A
complete partition with unequal shares as may be agreed between the parties is
not illegal and can be final. However, an unequal partition between karta as
the sole adult member and the minor children may be challenged at the instance
of the minor children on attaining majority or having a partition reopened by
the Court. Such a reopening however, will only be permitted if the division is
unjust and unfair.
KEY
NOTE
In
the light of the said law, it can be a sound tool of tax planning by giving
larger share to the less financially sound coparcener and lesser share to the
affluent.
It was
held tha t the term “hitherto assessed as undivided” will mean as assessment
made by the ITO meaning “actually assessed”. The Supreme Court further held
that it will not include a case in which return has been filed and the
proceedings for the assessment are pending.—[Roshan Di Hatti v. CIT (1968)
68 ITR 177 (SC)]
Partition
is not a transfer
Distribution
of the assets of an HUF in the course of partition, would not attract any
capital gains tax liability as it does not involve a transfer. There would be
no clubbing of incomes under section 64 as it would not involve any direct or
indirect transfer.
Partition
is not a transfer. Each coparcener has an antecedent title to the joint Hindu
family property. Though its extent is not determined until partition takes
place. That being so, partition really means that whereas initially all the
coparceners had subsisting title to the totality of the property of the family
jointly, that joint title is transformed by partition into separate title of
the individual coparceners in respect of several items of properties allotted
to them respectively. As this is the true nature of a partition, the contention
that partition of an undivided Hindu family property necessarily means transfer
of the property to the individual coparceners cannot be accepted.—[Ajit
Kumar Poplai and Another AIR (1965) SC 432)]
An
order under section 171 is not required when an HUF has not been hitherto
assessed
Section
171(1) of the Act starts with the expression “a Hindu Family hitherto assessed
as undivided”. Hence, if an HUF has not been assessed to tax, section 171 shall
be inapplicable. Section 171 of the Income Tax Act, 1961, has no application to
a case of a Hindu undivided family which has never been assessed before as a
joint family i.e. as a unit of assessment. In other words, this section has
application to a Hindu undivided family which has been assessed before as a
joint family and if the Hindu undivided family has never been assessed to tax,
this section has no application.
Section
171 of the Income Tax Act, 1961 has no application to a case of a Hindu
Undivided Family which has never been assessed before as a joint family, i.e.,
as a unit of assessment.—[CIT v. Kantilal Ambalal (HUF) (1991) 192 ITR 376
(Guj)]
Assessee along with his brothers and father constituted HUF - After death of father, family business and property
was separated between brothers - Assessee claimed his share of income as income
of HUF consisting of his widow mother, his wife and two
unmarried daughters - However ITO treated assessee as an individual - Tribunal
held that assessee even after partition continued joint with his mother and correct
status of assessee was that of HUF - On facts, order passed by Tribunal was correct and it
did not require any interference
If a
property belongs at one stage to a HUF and that family, by reason of
certain circumstances, is reduced to a single coparcener and some female members
it will continue to be a joint family property. The Tribunal posed the question
for answer whether the assessee, together with his widowed mother, his wife and
two unmarried daughters, constituted a HUF and found that the
assessee's mother was a member of the HUF along with the assessee.
According to the Tribunal, therefore, the assessee even after partition continued
joint with his mother. If that property at that stage belonged to a HUF,
the family could not cease to enjoy that status. It was beyond dispute that a
person can throw his property, movable or immovable, into a common hotchpot by
mere expression of his intention in that behalf. If the divided coparcener had
done that there could have been no problem. That, however, was not done and the
assessee could not base its claim on that. The assessee revised his returns,
but that was done after the assessment year so that the assessee could not say
that revision of the returns was an unequivocal expression of the intention to
throw the property in the common stock. Therefore, the business in the hands of
the assessee was that of the family consisting, inter alia,
of assessee and his widowed mother.
Even on
the assumption that the assessee's mother also separated the position would not
be any different even in those circumstances. In the result, the correct status
of the assessee was that of HUF. [In favour of assessee] (Related Assessment year : 1959-60) – [CIT v. Bawa Arjan Singh (1969) 73 ITR 576 (Del.)]
Responsibility to pay Tax After partition of an HUF up to the date of partition
As per
section 171(6), every member of the HUF before partition shall be jointly and
severally liable for the tax on the income assessed of the HUF. The same
section empowers the assessing officer to recover the tax due on completion of
the assessment on the disrupted HUF from every person who was member of the HUF
before partition. Further, as per section 171(7), the several liability of the
member shall be computed according to the portion of the joint family allotted
to him at the time of the partition.
It may
however be noted that joint liability of the member is personal and distinct
from the personal and several liability as found by the Supreme Court in the
case of Govindas v. ITO (1976) 103 ITR 123 (SC). As such a member of an
HUF before partition is not personally liable, after partition in respect the
liability of HUF, ex-members liability is personal.
Also,
unlike the several liability, the joint liability is not limited to the asset
received by the member on partition as noticed by the Supreme Court in the case
of Addl. ITO v. A.S. Thinmaya (1965) 55 ITR 666 (SC).
Validity
of Penalty on HUF after a total partition
The
provisions of section 171(8) give the mandate to an assessing officer to levy
penalty on an HUF disrupted after partition.
The
levy of such penalty has also been upheld by the Allahabad High Court in the
case of CIT v. Raghuram Prasad (1983) 143 ITR 212 (All).
Deed of
Partition
DEED OF
PARTITION
This
DEED OF PARTITION executed at Chennai, this .................. day
of............. 2019 between:
1.
.......................... S/o Shri ............................. residing at
........................................
2.
.......................... S/o Shri ............................. residing at
........................................
Which
term shall mean and include their respective heirs, legal representatives,
executors, administrators, assigns etc.
WHEREAS
the property more fully set out in the Schedule A hereunder are the properties
of the late Shri.................... who died intestate at ................ on
................ leaving the parties herein as Class I legal heirs to succeed
the said property;
WHEREAS
the parties herein have been enjoying the property more fully described in the
Schedule A hereunder-in common.
WHEREAS
certain misunderstanding arose between the parties herein and in order to avoid
the same and to preserve the dignity of the family and its members, it has been
decided to settle the issue in a fair and cheerful manner;
NOW
THIS DEED OF PARTITION WITNESSETH:
THAT in
pursuance of the above, the Parties herein mutually agree as follows:
1.THAT
Party of the First Part is allotted the property
more fully described in the Schedule B hereunder and the said Party of First
Part shall henceforth be separate and exclusive owner of the said property
allotted to her.
2.
THAT Party of the Second Part is allotted the
property more fully described in the Schedule C hereunder and the said Party of
First Part shall henceforth be separate and exclusive owner of the said
property allotted to her.
3.
Each of the Parties herein shall hereafter
hold and enjoy the property so allotted in severalty and freed and discharged
from all claims and demands of the other thereto subject however to the terms
and conditions hereinafter set forth.
4.
Each of the Parties herein releases has no
manner of any right and interest in property allotted to others so much so that
each of the parties hereto is the sole and absolute owner in his/her right of
the properties allotted to him/her in the relevant Schedules.
5.
There are no encumbrances or charges on the
properties hereby partitioned.
6.
The property hereby allotted to each party has been
entered upon this day and henceforth be held in severalty by such party without
any interruption or disturbance by the other or any one claiming through or
under him/her.
7.
Each of the parties herein shall meet all the
liabilities in respect of the public charges, taxes, including urban land tax
and other taxes attributable to the ownership of the respective property
allotted to each of them herein from this day onwards.
8.
Each of the parties hereto shall at the cost of the
other so requiring the same do every such act or thing as may reasonably be
required for further and more particularly assuring the property hereby
allotted to such party.
Schedule
A
(Total
Property Partitioned)
Market
Value of the property
Schedule
B
(Property
allotted to the First Party)
Market
value of the property
Schedule
C
(Property
allotted to the Second Party)
Market
value of the property
In Witness
whereof the parties hereto have signed on the day, month and year first above written in the presence
of
WITNESSES:
First
Party
Second
Party
