- 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 and
- 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.
Therefore a transaction can be recorded as a partition u/s 171 only if, where the property admits of a physical division, such division has actually taken places on 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 in so far as income-tax law is concerned, the matter has to be governed by section 171(1) of the Income Tax Act, 1961.
- Partial Partition: Partial partition means a partition which is partial as regards the persons constituting the HUF, or the properties belonging to the HUF, or both and
- Total and complete Partition- Assets of HUF are physically divided as per explanation to section 171 of the Income Tax Act 1961