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21. The learned CIT-Departmental Representative has contended that if an arbitration award is followed by decree of Court, then no stamp fee nor registration is required. Citing CIT v. Ghanshyam Das Laxmi Narain (1974) 95 ITR 438 (Pat), he has contended that the date of registration of the partition deed will be the date of partition. He has also cited ITO v. Naresh Batra (HUF) (1996) 58 ITD 23 (Chd). He has contended that the partition provided in Section 171 of the Act is to be construed strictly and it is not the same thing as partition under the Hindu Law. In his support, he has cited CIT v. Keshavlal Lallubhai Patel (1965) 55 ITR 637 (SC) and CIT v. Prem Bhai Parekh and Ors. (1970) 77 ITR 27 (SC). He has contended that there should be no confusion about severance of status with actual allotment of shares. He has contended that Section 171 of the Act is a mandatory provision and so the AO has to follow it strictly; and no liberal interpretation can be given to Section 171 of the Act.

34. Before we proceed to consider the partition falling in category No. (ii) mentioned above, we may note that a partition under Hindu Law can be with respect to one or more members of HUF only, leaving the remaining members joint, or it can be with respect to one or more properties of HUF only, leaving the remaining properties of the HUF as joint, or the partition can as well be partly or wholly with respect to both members as well as property.

35. As regards the partition falling in category No. (ii) mentioned above, a partition, in order to be recognisable or acceptable under IT law, or to be more specific, under Section 171 of IT Act, 1961, has to be a complete partition with respect to members as well as properties of HUF in view of Explains. (a) and (b) to Section 171 of the Act, has to be a severance in respect of all the members/coparceners of HUF as also in respect of all the properties of HUF. If some of the members remain joint or some of the properties remain joint, then such a partition will be only a "partial partition" as provided in Expln. (b) and will not be accepted or recognised as partition under Section 171 of the Act and the HUF will continue to be assessed in the status of HUF as provided in Section 171(1) of the Act.

36. A mere severance of joint status of family or of HUF may constitute a partition under conventional Hindu law but in a partition falling in category No. (ii) mentioned above, the IT Act, 1961, has further more requirements. In order that a partition of HUF may be accepted/recognised as such Under Section 171, an expression or manifestation of intention by any member/coparcener to separate himself from HUF/coparcenary will not, by itself, be sufficient to bring the matter of jointness to an end, that is, it will not amount to partition of HUF or severance of jointness, nor will it suffice to have the partition of HUF to be complete with respect to all the members of HUF and all the properties of HUF, but it will further be necessary that there should be physical division of the HUF property by metes and bounds. A physical division of the income without physical division of property, which is capable of physical division, will not constitute a partition. If under an alleged partition of HUF property, the shares of individual members in the property are only defined or specified but actual physical division or division by metes and bounds of property in accordance with the defined/specified shares of the respective members/coparceners does not take place, then no partition, acceptable/recognisable under IT Act, 1961, can be said to have been effected. Thus, in order that there should be a valid partition of HUF, acceptable under Section 171 of IT Act, 1961, there should be actual physical division of the property as per the defined/specified share allotted to each individual member out of the HUF property.

41. However, considering the legal position as emanating from the cited decisions as also the celebrated commentaries, we find that the elaboration made by the assessee's learned advocate, Shri Shashi Tulsiyan, as to how a physical division of property of HUF should take place in order that there is a valid partition, acceptable/recognisable under IT Act, 1961, has substance. We agree with the contention of the learned Authorised Representative of assessee that for a partition of HUF to be valid/acceptable under Section 171 of the IT Act, it is not always essential that each of the properties of HUF should be broken into, pieces/portions, nor that each property should be broken into as many shares as are the sharers or members of HUF, so as to fall within "division by metes and bounds". In our considered opinion, what is meant by the expression "physical division of property by metes and bounds", in the context of partition of HUF, is that there should be. actual physical division of the property as per defined/specified shares allotted to each member of HUF under partition, if that property admits of such physical division and if the property is of such nature that it does not admit of such physical division, then such division as the property admits of. However, it will very much depend upon the sweet will of the members of HUF to mutually agree as to in what manner they divide the property so as to allot separate shares to each one of the members. We take an illustration, suppose there is an HUF having four members Q, R, S, T and one property P1 which has four equal divisible portions or flats say A, B, C and D. The four members may, under partition, agree that each one of the members G, R, S, T should get one portion/flat in the property P1 say A, B, C, D, respectively, then by this defining/specification alone the partition as per Section 171 of the Act will not be valid if they simply define/specify their shares that the members Q, R, S, T to get the portions/flats A, B, C and D of the property PI as their respective shares of the property P1 but still all the four portions/flats A, B, C, D remaining joint as they have been so far without the portions/flats A, B, C, D, being actually physically divided/separated and thenceforth each of the members taking one portion of the combined total rental income earned from the whole compact property P1. In the given illustration, for a valid partition under Section 171 of the Act, the property P1 has to be actually physically divided into four separate portions in the manner that one specific portion of the property (separated) goes to the share of each member as per the respective defined/specified share allotted to him, say one specific portion P-1A goes to the share of Q, the second portion of property, P-1B goes to the share of R, the third portion of the property P-1C goes to the share of S and the fourth portion P-1D goes to the share of the fourth member R. But, the members Q, R, S, T, may also mutually so agree that Q takes half portions of the property comprising of P-1A and P-1B, R takes P-1C, S takes one portion P-1D and T takes no portion of this property PI but takes only cash compensation in lieu of his share of the property PI and thus the property PI is actually physically divided into three shares only and the fourth sharer is not taking any portion of the property PI but is taking only cash compensation from other member/members, then such partition, whereunder even though there were four members of HUF and one property PI but only three divisions of property PI have been made and allotted to three members while the fourth member has received only cash compensation by way of his share of HUF property will be legally valid partition, acceptable under Section 171 of the. Act. Again, if the four members mutually, so agree that the whole property PI is given to Q as his share of HUF property and the remaining three members R, S and T do not get any portion of the property PI but they receive cash compensation from Q, then this will also be a valid partition of HUF and its property and acceptable/recognisable under Section 171 of the Act. Thus, the position of actual physical division or physical division by metes and bounds to be made implies that when the shares of members of HUF in the joint property have been defined/specified under the agreement/arrangement/award or scheme of partition, then in order that there may be a valid partition under Section 171 of IT Act, actual physical division of the joint property of HUF as per the defined/specified respective shares allotted to the members under partition agreement/arrangement/award has to be made and so divided separate shares to be given to the respective members, and without that there will be no valid partition. In other words, the actual physical division of property or physical division of property by metes and bounds has essentially to be done to effect a valid partition under Section 171 of the Act when defined shares in the HUF property are allotted to various shares or members of HUF under partition scheme, so that effect is given to that scheme of partition. However, if under partition agreement/scheme the members mutually so agree that they allot a particular property to one member Q only and the other members R, S and T agree to take cash compensation only, then if that property is given to one member Q, then that will also be a valid partition acceptable/ recognisable under Section 171 of IT Act inasmuch as its actual physical division comprises in the whole of it being given to one member Q and no portion of it being given to any of the other members R, S and T; the essence of the expression 'physical division by metes and bounds' in the context of a partition under Section 171 of the Act being that after partition the property should, in no manner, remain in jointness.