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Ancestral Property Partition and Family Rights
हिंदी में पढ़ेंAugust 16, 2022
By Advocate Chikirsha Mohanty
Table of Contents
- What is an Ancestral Property?
- What is the procedure for partition of an Ancestral Property?
- Rights of Daughters or Granddaughters in Father’s or Grandfather’s Ancestral Property
- Ancestral Property- Rights to Married Daughters
- Wife’s Rights to inherit Husband’s Ancestral Property
- Daughter-in-Law’s Rights in Father-in-Law’s Property
- Rights of a Son in the Ancestral Property
- How can a lawyer help you in the family partition?
Numerous portrayals of family disputes over a property in movies and novels have proved only one point that ever since the beginning of time a property has been a mark of high economic status due to which it has been a matter for dispute amongst kin. Property disputes among families are a common occurrence in India these days. Legal disputes over property take place across people at different levels in society, be it households with low income or wealthy families and most of these disputes relate to ancestral property.
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What is an Ancestral Property?
Ancestral property is a property inherited up to three generations in a Hindu Undivided Family (HUF). In other words, it is a property that descends from the father, grandfather, and great grandfather. Before 2005, only male members of the family had a right to inherit the ancestral property, however, the 2005 amendment to the Hindu Succession Act gave equal inheritance rights to women as well.
What is the procedure for partition of an Ancestral Property?
Partition of ancestral property is when two or more members of a family claiming rights over the property want to gain ownership of their share in the property separately. The partition of property amongst family members can then take place which may be either contested (without mutual consent) by filing a partition suit or uncontested through partition deed or family settlement .
In case the partition is contested, the family members can file a partition suit. A suit for partition is essentially filed when all the legal heirs are not in agreement in respect of the terms and conditions of the division of property. In this case, a legal notice for partition can also be set. Whereas, if the division of property is being done with mutual agreement, one can enter into a partition deed or a family settlement. The members of a family having the right over a particular property can execute a partition deed to distribute a jointly owned property among the co-owners. A family settlement can also be executed by the co-owners of the joint family property where the intention is to divide the property amongst the co-owners mutually, without any legal dispute.
Rights of Daughters or Granddaughters in Father’s or Grandfather’s Ancestral Property
The dependability of women for finance over the years, be it on father, brother, or husband, has been at the root of much hardship for women. This is why the amendment to the Hindu Succession Act in the year 2005 was made to bring the daughters at par with sons with regard to property inheritance rights.
Under Hindu law, the property is divided into ancestral and self-acquired property. Ancestral property is defined as one that is inherited by up to four generations of male lineage and should have stayed undivided throughout this period. Whereas, self-acquired property refers to a property that has been bought by the father with his own money.
In the case of an inherited property, an equal share accrues by birth itself, be it a daughter or a granddaughter. Thus, the father or the grandfather cannot Will such property to anyone he wants to, or deprive a daughter or a granddaughter of her share in it. However, in the case of self-acquired property, the father has a right to gift the property or will it to anyone he wants, and the daughter will not have a right to raise an objection.
Consult: Top Property Lawyers in India
Ancestral Property- Rights to Married Daughters
Before the 2005 amendment, once a daughter was married, she ceased to be a part of her father’s Hindu Undivided Family (HUF). However, the amendment stated that every daughter, whether married or unmarried, is considered a member of her father’s HUF and can even be appointed as ‘Karta’ of the HUF, thus, granting daughters equal rights , duties, and liabilities in matters related to inheritance as were earlier limited to sons.
Wife’s Rights to inherit Husband’s Ancestral Property
As per Hindu law, a Hindu wife does not have inheritance rights in her husband’s ancestral property. However, a wife can have her husband’s share in the ancestral property after his death. This is when the husband has died before the partition of his ancestral property has taken place. Moreover, in case a husband dies after taking his share of the ancestral property, such property will be divided between the wife or wives and the children of the deceased equally.
Daughter-in-Law’s Rights in Father-in-Law’s Property
As stated above, a wife only has legal rights to inherit the property owned or inherited by her husband and not the ancestral property of her husband. Therefore, a daughter-in-law does not have any inheritance rights in the property bought or inherited by her father-in-law.
Rights of a Son in the Ancestral Property
A right to inherit the ancestral property accrues to a son by the time of his birth. A son is the joint owner of ancestral property and has the right to file a partition suit for his rightful share in the property. He has a right to ask for his share in the ancestral property during the lifetime of his father or grandfather or great grandfather, whoever is the ‘Karta’. He also has the right to sell his share to any third person before a formal partition of the property has taken place.
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How can a lawyer help you in the family partition?
Sometimes the law and the legal framework can get confusing and difficult to understand, especially when the issue is regarding a dispute related to family property. In such a scenario, one may not realize how to determine the legal issue, the area to which the issue relates, whether the issue requires going to court, and, how the court procedure works. Seeing a lawyer and getting some legal advice can enable you to comprehend your choices and can give you the certainty to enable you to determine your legal recourse.
An experienced attorney can give you expert advice on how to handle your property issue owing to his years of experience in handling such cases. A property lawyer is an expert on the laws and can help you avoid significant mistakes that may cause financial harm or will require future legal proceedings to correct. You can also use LawRato's Free Legal Advice service to get free advice on your case from expert property lawyers. Thus, by hiring an attorney you can ensure avoid delay and can get your share in the property as quickly as possible.
Greater Kailash - 1, Delhi
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Comments by Users
vk
can a common place in the partitioned house, can be enjoyed by the person who bought one of the share without any NOC from other share holders.
Reply by LawRato
In case the partition has taken place by meets and bounds and is registered under a partition deed, each person who acquires a share becomes an independent owner of such portion. Therefore, such a person is free to transfer his share or portion in the property to any person, without the consent of the other members. Such transferee, as far as practicable, shall be entitled to the same rights on the common areas as the transferor. In case any obstructions are created by the members, the transferor may approach the court for on order of injunction.
Venkatesan
Good Information
tenneti surya bagavanulu
A good attempt is made. very glad. God may bless you to take heights in the profession or judiciary . Tenneti surya bagavanulu and tenneti pdmavathi advocates , visakhapatnam.
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Legal Questions Answered by Top Lawyers
. we are 4 brothers.my father named 30-30 acres of land in name of my two big brothers when they were children.dat time government was taking back land in sealing dats y. at dat time i was not born.now after death of my father they are not giving me my part of land.i am financially weak.tell me how can i get my part of land in easiest way possible.
Answer
Ancestral property is a property that has been inherited upto 4 generations of male lineage. By birth itself a right to share in the property occurs under this kind of property. Any property that has been inherited from mother, grandmother, uncle or brother is not considered as ancestral property. C. Krishna Prasad vs C. I. T. Bangalore on (12 November, 1974) it was held that a coparcener obtains a share on partition of ancestral property will be considered as ancestral property as regard his male issue.
Partition brings the joint status to an end and joint family ceases to be joint anymore. Mitakshara School explains that “partition is an adjustment of diverse rights regarding the whole by distributing them of the aggregate”. When the shares of each coparceners are given the partition is said to have had effect. Supreme Court in Sarin v. Ajit Kumar (1 March, 1965) held that when each coparcener gets a title to the said property partition takes place. But there are certain properties that cannot be divisible which are by nature not capable of division like dress, vehicle, ornaments, cooked food, female slaves, property used for pious purpose.
By way of partition you can divide the property. Partition can be made by mere declaration to separate, Partition by Notice, Partition by Will, Conversion to Another Faith, marriage under Special Marriage Act 1954, Partition by Agreement, Partition by Arbitration, Partition by Father, and Partition by Suits. Girjanandini v. Brijendra (11 August, 1966) it was held by Supreme Court that partition can ordinarily take effect by instituting a suit. These 9 modes of partition are not exhaustive and there can be other circumstances as well that can be admissible for partition.
When a division takes between brothers after partition they will take equal shares in the joint family property. If there are 5 brothers then each one will take 1/5th share in the property. Coparcener’s interest devolves by survivorship under Mitakshara School. When partition is between father and sons each son will take a share equal to share of his father. Under Hindu law every coparcener has a right to partition and entitled to a share on partition. Under Hindu Succession (Amendment) Act 2005 even daughter are entitled to a share in the property. Section 6 gives daughters right to be entitled to a share as per amendment. Share inherited by mother and daughter will go as a coparcener property.
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Sir, It is to inform you that my father had done two marriages which was against our wish. I am son of first mother. And there are two step brothers from second mother. My mother expired five years earlier and my father expired last year. Now, I want to know that how ancestor- property will be divided among us(I myself, two step brothers, step mother) Is there any law according to which property can be divided in one-third parts? Please give useful legal advice which would be helpful to take future actions.
Answer
1. You can file a partition suit claming your share of the property,
2. Get the property partitioned and devided by meets and bounds,
3. If the property is not a dwelling house where all the co-owners are staying together, you can sell your sharte to a third party,
4. If it is a jdwelling house, you shall have to offer to sell your share to all the other co-owners at the same price which you are getting from the third party and if they refuse to buy the same, you can sell it to the third party.
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my grandfather had ancestral property, he has three sons and a wife.My grandfather died intestate in the year 1985 and my grandmother died in the year 2014 leaving three sons.How the property shall be divided. whether this is a right division My grandfather Son 1 Son2 Son3 as an equal share in the ancestral property. Please reply.
Answer
The property of a Hindu male dying intestate is distributed among his heirs in accordance with section 8 and 9 of The Hindu Succession Act, 1956. As per these the property of a Hindu dying intestate devolves upon his heirs of Class I who take the property to the exclusion of all other heirs. But what if there are more than one Class I heirs among whom the property of the deceased devolves? What rules are to be followed in such devolution. Section 10 of the Act lays down the rules to be followed in such cases. Section 10 provides as under:
Distribution of property among heirs in class I of the Schedule: The property of an intestate shall be divided among the heirs in class I of the Schedule in accordance with the following rules:-
Rule 1.-The intestate’s widow, or if there are more widows than one, all the widows together, shall take one share.
Rule 2.-The surviving sons and daughters and the mother of the intestate shall each take one share.
Rule 3.-The heirs in the branch of each pre-deceased son or each pre-deceased daughter of the intestate shall take between them one share.
Rule 4.-The distribution of the share referred to in Rule 3-
(i) among the heirs in the branch of the pre-decease son shall be so made that his widow (or widows together), and the surviving sons and daughters get equal portions ; and the branch of his pre-deceased sons gets the same portion;
(ii) among the heirs in the branch of the pre-deceased daughter shall be so made that the surviving sons and daughters get equal portions.
Rule 1: The intestate’s widow, or if there are more widows than one, all the widows together, shall take one share.
Suppose A, a Hindu, dying intestate at the time of his death is survived by two windows and a son. A was the owner of one house. Now as per the rule, heirs in Class I shall take the property simultaneously and to the exclusion of all others. And in the above case all are Class I heirs. But two of them are widows of A. Therefore, as per the provisions of Rule 1 of section 10, both the widows of A shall take one-half share in the house of A and the other half shall go to A’s son. Hence the property of A by virtue of the above rule would be divided in only two parts and not three as all the widows together are entitled to only one part by virtue of Rule 1 of section 10. However, among themselves, both the widows shall inherit equally and one-half of the portion of A’s house that they are entitled to shall be divided equally among them. Therefore share of A’s son in A’s house upon A’s death shall be one-half while the share of each widow of A shall be one-fourth.
Similarly if in the above example A is survived by three widows and three sons, the house of A upon A’s death shall be divided in four equal parts. Three parts, i.e. one part each shall be inherited by each son while the fourth part shall be inherited equally by the three widows.
However, if at the time of A’s death he is survived by only two widows, both of them shall inherit the house of A equally, i.e. both of them shall be entitled to one-half share, there being no other Class I heir.
Rule 2: The surviving sons and daughters and the mother of the intestate shall each take one share.
A, a Hindu male dies intestate and is survived by his mother, two widows, two sons and two daughters. Now reading both Rule 1 and Rule 2 together, it becomes clear that the property of A shall be divided in 6 parts. Each daughter shall inherit one part. So shall each son. There being two sons and two daughters surviving A, each shall inherit one part. Hence, four parts of the property shall be distributed among A‘s four sons and daughters. Of the remaining two parts, A’s mother alone shall be entitled to one part and by virtue of Rule 1, both the widows of A shall be together entitled to one part.
Rule 3: The heirs in the branch of each pre-deceased son or each pre-deceased daughter of the intestate shall take between them one share.
A, a Hindu male dying intestate, is survived by one widow, one son, one daughter and two grandsons from one predeceased son, i.e. a son who had already expired at the time of A’s death. Now A’s widow shall take one share of A’s property. One share each shall be taken by A’s surviving son and daughter. As far as A’s grandsons are concerned, by virtue of Rule 3, they shall together take one share as they are the heirs of A’s predeceased son. Therefore, A’s property on his death shall be divided in 4 parts. The one part inherited by A’s two grandsons from a predeceased son shall be divided equally among them. Here it may be mentioned that the position of the heirs of the deceased’s predeceased sons is similar to the deceased’s widows. Deceased’s widows, irrespective of their number are entitled to only one share in the property of the deceased. Similarly irrespective of the number of Class I heirs of a predeceased son of a deceased, they all together take one share. Here even if the widow of A’s predeceased son was alive, even then she would have inherited together with her two sons only one part of A’s property.
Rule 4 (i): The distribution of the share referred to in Rule 3-
(i) among the heirs in the branch of the pre-decease son shall be so made that his widow (or widows together), and the surviving sons and daughters get equal portions ; and the branch of his pre-deceased sons gets the same portion;
(ii) [Explained in next point]
Rule 4(i) deals with distribution of the share that the branch of a deceased’s predeceased son is entitled to on the deceased’s death. As mentioned above, the branch of the predeceased son of a male Hindu dying intestate gets one share in the deceased’s property. That one share is to be distributed among the heirs of that predeceased son in accordance with this Rule.
Thus if A’s predeceased son had two widows and two sons, then at the time of A’s death, they all together would have inherited just one part of A’s property. Among themselves however, the distribution of this one share shall be made in accordance with this rule. Hence the one part that they have inherited shall be divided in three equal parts – one part each to the two sons of A’s predeceased son and one part to the two widows of A’s predeceased son. Here if A’s predeceased son say B, had along with his two widows and two sons also got another son C who had already predeceased B and on his death was survived by one widow and one son, then the one part of A’s property that B’s branch inherits shall be divided into 4 parts – one part each to his two surviving sons, one part to his two widows and one part to the branch of his predeceased son C.
Rule 4(ii):
The distribution of the share referred to in Rule 3-
(i) [Explained in point above]
(ii) among the heirs in the branch of the pre-deceased daughter shall be so made that the surviving sons and daughters get equal portions.
This rule deals with the distribution of the share of property of a Hindu male dying intestate that devolves under Rule 3 upon the branch of his predeceased daughter. Now as per Rule 4(ii), this distribution shall be so made that that the surviving sons and daughters of the predeceased daughter get equal portions. Therefore, if A, a Hindu male dying intestate is survived by a widow and a grandson and granddaughter from a predeceased daughter B, then A’s property upon his death shall be divided in two parts- one part to his widow and one part to B’s branch. The part inherited by B’s branch shall be divided equally between B‘s son and daughter.
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I am deciding to build up an e-commerce business setup in collaboration with various start-up designers and a third party delivery services. I would like to ask: 1. What kind of legal measures should I take into consideration? 2. What measures should a legal contract with a designer should include so that there is no scope of copyright infringement or intellectual property theft?
Answer
All the necessary steps required for starting an offline business is required to be taken by you for an ecommerce business as well which includes, forming a firm/company, opening Bank account, taking registration nos. from Sales Tax , Income Tax and labour department etc, 2. You should execute a Non ....Read More
My grand-pa, who is died now, inherited property from his father. My grand-pa got 1 son (my father) and 2 married & 1 un-married daughters. Now all daughters are claiming equal share on the property left by my grand-pa. As my father to survive on this property alone unlike married female siblings, he is asking to divide the property in to two equal parts, one for him (my father) and second part for all his female siblings. Is this correct? or do we have to make equal share among all siblings? Please advise. They all (my father and aunties) are fighting because of this property. Please help.
Answer
Daughters (irrespective married or not) have equal rights in the parental property after the advent of amendment in Hindu Succession Act 1956, that came into force since 9th sept 2005.
The Hindu Succession Act, 1956, originally didn't give daughters equal rights to ancestral property. This disparity was removed by an amendment that came into force on September 9, 2005.
“All that is required is that the daughter should be alive and her father should also be alive on the date of the amendment,” it said. The court also held that alienation of ancestral property, including its partition, which may have taken place before December 20, 2004, in accordance with the law applicable at that time, would remain unaffected by the 2005 amendment, and those partitions can no longer be reopened by daughters.
in the current scenario you are in, it is unfair to have a partition in the said order that you have mentioned
If you belong to any other religion and not Hindu, we would have a different opinion based on applicability - For further queries please contact for consultation
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A has registered a HUF in West Bengal. He has 2 sons (namely S1, S2 ) and 2 Daughters (namely D1 and D2). A as well as his wife has deceased. Their children are now planning to sell (and not partition) the property registered under the HUF. (The property is a part of HUF). Current Scenario: S1: Alive and has a son, a daughter and a wife S2: Dead and has a son, a daughter and a wife. D1: Alive and married and has a son D2: Dead with husband taking care of a son and a daughter. a. If we plan to sell the property, kindly let us know as to whose signatures are required to full fill the necessary legal requirements? b. Is it required under the law to first partition the property and then sell their individual parts? c. How many generations can claim for partition under the law? If the partition is not claimed for four generation, what happens to the property?
Answer
Meaning of 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 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.
Partition could be partial also. It may be partial vis-a-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-a-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-a-vis properties and members both.
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 and tax laws, in two respects, recognition of partition under tax laws differs from that under Hindu Law.
For recognition of partition under Hindu Law division of properties by metes and bounds is not necessary. However, for recognition of partition under tax laws, division of properties by metes and bounds is necessary.
Again under Hindu Law partial partition is recognised. However, in view of provisions of S.171(9) of Income-tax Act, 1961, partial partitions will not be recognised for tax purposes.
Right to claim Partition: – Under the Hindu law, any coparcener can make a claim for partition.
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 vs. Govindlal Mathurbhai Oza – [1982] 138 ITR 711 (Guj.)}
The other members continue to remain joint.
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 56 of Hindu Succession Act, there is a deemed partition for a limited purpose of determining the share of the deceased co-parcener for the purpose of succession under the Act.
Right of minor to claim partition:- A minor can claim partition through his guardian. A reference in the above regard can be made to the decision of the Supreme Court in the case of Apoorva Shantilal Shah vs. CIT as reported in [1983] 141 ITR 558 {SC}.
Eight of wife of Karta to claim partition :- As per Hindu law, the ordinary rule is that a partition can be claimed only by a coparcener and wife not being a coparcener she cannot ask for partition.
Certain States including Maharashtra have brought amendment to the Hindu Succession Act, 1956, conferring co-parcenery rights to daughters and as such they can claim partition.
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.
Equal distribution of Share among sons by Karta Father: – A father in his right as patria potetas or otherwise can effect a partition between himself and his son of the joint family property of HUF. However, he has to allot equal shares to the sons.
The father is expected to act bona fide and only aggrieved party can seek relief by way of appropriate proceedings. However, till such a partition is held invalid by a competent court, it must be held as valid.
Apporva Shantilal Shah vs. CIT [1983] 141 ITR 558 (S. C.)
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 vs. Arun Kumar Jhunjhunwala and Sons [1997] 223
Position when the wife of the karta also been allotted a separate share of property:- The property of the wife of the Karta will be her individual property. There is a difference of opinion among the Courts as to whether she continues to be a member of her husband’s HUF after allotment of a share to her on partition.
Partition is not transfer:- The Supreme Court in the case of CED vs. Kanhlal Trikamlal [1976] 105 ITR 92, 101 (S. C.) observed that partition is really a process in which and by which a joint enjoyment of the property is transformed into enjoyment in severalty. Each one of the sharers has an antecedent title and therefore, no conveyance is involved in the process, as confirmed of new title is not necessary. This decision is an authority for the proposition that no conveyance is required for a partition, but not for whether there is a transfer involved in a partition.
In the case of Kalooram Govindram vs. CIT [1965] 57 ITR 335 {S.C.), the Supreme Court did not give any opinion as to whether a partition constitutes a transfer within the meaning of Transfer of Property Act. But according to Andhra Pradesh High Court in the case of Dwarka Prasad vs. CED [1968] 67 ITR 281 (AP) the Supreme Court in 57 ITR 335 has given final authority that in partition there is no transfer.
Question:- If a house-property belonging to an HUF is divided (in 4 portion) and then transferred to Karta and his 3 sons, what will be the tax impact of this transaction in the hands of HUF and each of the co-parcener?
Answer:- The house property is a capital asset. Its transfer result in capital gains which is chargeable to tax under the I T Act. However, transfer of assets from HUF to its members is special case. There is express provision under the I T Act which says that the distribution of capital asset on total or partial partition of HUF is not regarded as transfer for the purpose of I T Act. The said provision contained in section 47(i) of the I T Act is as under:
“47. Nothing contained in section 45 shall apply to the following transfers :(i) any distribution of capital assets on the total or partial partition of a Hindu undivided family;”
The partition in Hindu law is effected by a definite and unequivocal indication of a coparcener’s intention to separate. Similarly, a partial partition is effected by a definite and unequivocal indication of the coparcener to partition a particular business or property of the joint family leaving the other assets as joint family property. Therefore ,it is very important to understand word “total or partial partition”. In that case only, distribution of assets is not regarded as transfer and no capital gains occur in hand of HUF. However, in individual’s hand there is no taxable income in any case on transfer of house property from HUF.
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.
Basically, a partition can be made orally and there is no requirement in law that the partition must be evidenced by a written agreement. Even a partition of immovable property of HUF can be through an oral agreement [Popatlal Devram vs. CIT [1970] 77 ITR 1073 (Orissa).]
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.
For example, it has been held that a business cannot be partitioned by metes and bounds. [R.B. Bansidhar Dhandhania vs. 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 vs. CIT [1972] 849 ITR 186(All).]
In the case of CIT vs. K. G. Ramakrishnier [1963] 49 ITR 608 (Mad.), the Madras High Court held that an asset which is not capable of physical division can be partitioned by making entries in books. Here, entries relating partition were passed in books of HUF and not the partnership firm where HUF was a partner. The partition was held valid.
Procedures for recognition of partition:- The HUF, which has been hitherto assessed, must make a claim to the assessing officer that the HUF properties have been subjected to total partition.
The Assessing Officer will make an inquiry in to the claim after giving notice to all members of the HUF and if he is satisfied that the claim is correct, he will record a finding that there was a total partition of the HUF and the date on which it has taken place.
Partition for conversion of family business into partnership:- A business cannot be partitioned by metes and bounds. This is the observation of the Patna High Court in the case of R.B. Bansidhar Dhandhania vs. CIT [1944] 12 ITR 126 (Patna). Here, the business of HUF was partitioned by well defined shares and partnership formed was held valid.
It may however be noted that a partition can be effected orally. Subsequent entries in the books of account are good evidence of partition. The Bombay High Court in the case of CIT vs. Shiolingappa Shankarappa Mendse and Bros. [1982] 135 ITR 375 (Bom.) had occasion to deal with a case where there was a partition of HUF and subsequent formation of a partnership firm by the erstwhile members of the HUF. Transaction of partition was evidenced by book entries. Partnership was held valid.
Where, however division of property (business) of HUF was not effected properly, the claim that business of HUF was converted into that of partnership firm was not upheld and the income from the business was held assessable in hands of the HUF itself. {Kaluram & Co. (HUF) vs. CIT [2002] 254 ITR 307 (Del.)]
Order u/s 171 not required where a HUF has not been assessed to tax:- The wordings of section 171 show that the section has no application to a HUF, which has not been hitherto assessed. The authorities in support of this proposition are :–
CIT vs. Kantilal Ambalal (HUF) – [1991] 192 ITR 376 (Guj.)
Addl. CIT vs. Durgamma (P) – [1987] 166 ITR 776 (A.P.)
CIT vs. Hari Krishnan Gupta – [2001] 117 Taxman 214 (Del.)
Reference may also be made in this regard to the decision of the Supreme Court in the case of Roshan Di Hatti vs. ITO – [1968] 68 ITR (SC)/Sir Sunder Singh Majithia vs. CIT – [1942] 10 ITR 457 (PC).
Validity of Penalty on HUF after a total partition: The provisions of section 171[8] gives the mandate to an assessing officer to levy penalty on a HUF disrupted after partition.
The levy of such penalty has also been upheld by the Allahabad High Court in the case of CIT vs. Raghuram Prasad [1983] 143 ITR 212 {All}.
Where a coparcener with only his widow as legal heir dies, could a partition be deemed as between the surviving coparcener and the widow on his death? : . Where a deceased dies issueless leaving a widow there is no question of a deemed partition u/s. 6 of the Hindu Succession Act. This is the finding of the Gujarat High Court in the case of Bhartiben S. Jhaveri vs. CED [1999] 238 ITR 995 (Guj). The reason being there is no coparcenery with only one male.
A similar ratio was held by the Allahabad High Court in the case of CED vs. Smt. S. Harish Chandra [1987] 167 ITR 230 {All} that proviso to section 6 of the Hindu Succession Act does not come into operation where there is no coparcenary in existence at the time of the death of the male member.
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 vs. ITO [1976] 103 ITR 123, 132 {SC}. As such a member of a 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 vs. A.S. Thinmaya [1965] 55 ITR 666, 671 {SC}.
Notional partition: – Under the provisions of section 6 of the Hindu Succession Act, 1956, where a Hindu male dies intestate on or after 17th June 1956, having at the time of his death an interest in a Mitakshara coparcenary property leaving behind a female heir of the class I category, then his interest in the coparcenary property shall devolve by succession under that Act and not by survivorship. The interest of the deceased will be carved out for devolution as if a notional partition had taken place before the death of the deceased. This is the concept of notional partition.
Notional partition and destruction of the family:-The notional partition only crystallises the share due to the female heir and does not disrupt the joint family.
A direct authority can be found in the decision of the Supreme Court in the case of State of Maharashtra vs. Narayan Rao Sham Rao Deshmukh, which is reported in [1987] 163 ITR 31 {SC}, wherein it was held that the purpose of section 6 is only for ascertainment of the share of the female heir and unless the share is given away, the same cannot be excluded from the assets of the HUF.
The Gujarat High Court in the case of CWT vs. Chandrasinhrao D. Gaikwad [1999] 237 ITR 875 came to the same conclusion without referring to the above decision of the Supreme Court.
In fact, the widow of a deceased coparcener is entitled to the share of the deceased in a Hindu individual family governed by Mitakshara Law according to section 6 of Hindu Succession Act, 1956 continues to be member of HUF until she files suit for partition.
[Gurupad Khandappa Magdum vs. Hirabhai Khandappa Magdum [1981] 129 ITR 440 (S.C.) followed in Kishandas vs. CWT [2000] 243 ITR 307 (A. P.)]
Notional partition exist under the Income-tax Act:- In order that a claim for partition has to be recognised under the Income-tax Act, the claim for partition must fulfil the condition laid down in section 171.
A mere notional partition by operation of a statute like the Hindu Succession Act, 1956 is not sufficient for recognising a partition under the Income-tax Act.
Patna High Court in the case of CIT vs. R.B. Tunki Sah Baidyanath Prasad [1991] 189 ITR 351 {Patna] approved on facts by the Supreme Court in 212 ITR 632 {SC}.
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Daughter has right over Parental Property even if Father died before Hindu Succession (Amendment) Act 2005
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