1. At the instance of the assessee the Income-tax Appellate Tribunal, Delhi Bench "A" (herinafter referred to as "the Tribunal"), has referred this case to us for answering the following question of law, namely :

"Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was correct in holding that the transaction of giving Rs. 45,000 to Smt. Gatkoo Bai was neither a valid partition nor a family arrangement nor a valid gift and, therefore, disallowance of interest of Rs. 2,898, Rs. 2,838 and Rs. 2,336 in the assessment for the years 1959-60, 1960-61 and 1961-62, respectively, was correctly made ?"

2. For answering the aforesaid question the following facts might be recalled. M/s. Dalichand Tejraj, Pali, is a Hindu undivided family owning a business and certain immovable properties and other assets, whom we shall hereinafter call as "the assessee". Three appeals relating to the assessment years 1959-60,1960-61 and 1961-62, were preferred by the assessee before the Tribunal. The facts with which the Tribunal was concerned were that in January, 1941, Dalichand, the karta of the assessee Hindu undivided family, who was issueless, had adopted Tejraj, by virtue of a deed of adoption dated January 4, 1941. Some time in January, 1947, Dalichand died and Tejraj became the karta of the assessee Hindu undivided family. On October 23, 1957, a sum of Rs. 45,000 was shown as having been given to Smt. Gatkoo Bai, the widow of Dalichand, and an entry in the book was made as under:

" Copy of page No. 2 Journal Samvat 2013.

Dalichand Account Kartik Badi 30 Samvat Dr.

Cr.

2013, dated 23-10-57 Wednesday I Mutual settlement was done agreeable to both the parties 1,86,317-13-6 To Musamat Gatkoo Bai, w/o Dali Chand Kankaria Tejraj Kankaria 45,000 1,41,317-13-6 1,86,317-13-6 1,86,317-13-6 (Sd.) Tejraj Kankari Over one anna Revena, ue stamp Sd.) Gatkoo Bai, Over one anna Revenue Stamp Witness : 1. Mohanlal, s/o Dogarmal, (Sd.) Mohanlal.

2. Kalyanmal, s/o Keshrimal Borundia (Sd.) Kalyanmal Borundia."

3. According to the assessee's books of account up to Samvat year 20 9. Smt. Gatkoo Bai showed withdrawals and also interest payments made to her, which had accrued on the sum of Rs. 45,000. For the relevant assessment years, the interest which accrued to Smt. Gatkoo Eai was Rs. 2,898, Rs. 2,838 and Rs. 2,336. The assessee claimed the payment of these interest amounts as business expense. The Income-tax Officer while assessing the assessee for the 3 years mentioned above disallowed the same on the ground that the transfer of the amount was not valid and that it continued to belong to the Hindu undivided family. The assessee preferred appeals against the assessment orders before the Appellate Assistant Commissioner but without success. Then the assessee preferred three appeals before the Tribunal. By its consolidated order, dated May 16, 1968, the Tribunal held that there could be no question of partition between the mother and her only son being regarded as valid under the Hindu law and that on the face of the specific narration in the books of the assessee evidencing that the sum of Rs. 45,000 was given to Stnt. Gatkoo Bai as a result of mutual settlement which was contrary to her affidavit was not a valid partition. The Tribunal also found that it was neither a family arrangement nor a valid gift and the disallowance made by the income-tax authorities was in accordance with law. Dissatisfied, the assessee moved an application under Section 256(1) of the Income-tax Act 1961, praying that a question of law arose from its order and the same may be referred to the High Court. This brings the assessee before us.

4. Mr. A.L. Mehta, learned counsel for the assessee, urged that the transaction was a family arrangement and he faintly added that it was also as a result of partition. He placed reliance on Mt. Mahadei Kunwar v. Padarath Chaube, A.I.R. 1937 All. 578, Smt. Buchibai v. Nagpur University, A.I.R. 1946 Nag. 377 and Teh Bahadur Bhujil v. Debi Singh Bhujil, A.I.R. 1959 Assam 109. All these authorities clearly indicate the constituents of the concept of a family arrangement. He also urged that this family arrangement was as a result of the semblance of a right which resided in Smt, Gatkoo Bai of residence and maintenance.

5. Mr. S.K. Mal Lodha, learned counsel for the revenue, urged that Kalichand and Smt, Gatkoo Bai were residents of Pali, a part of the erstwhile State of Jodhpur : that the Hindu Women's Rights to Property Act of 1937 was not in force in the former State of Jodhpur. Therefore, no right resided in Smt. Gatkoo Bai to ask for a partition on the death of Shri Dalichand, which took place in January, 1947. The relevant section of the Hindu Succession Act, which would govern this case, would be obviously Section 8, urged the learned counsel, and unless it was shown that Dalichand had left some self-acquired property in which Smt. Gatkoo Bai had any claim of succession, no right to claim partition resided in her. The question of validity of partition was a question of law and the income-tax authorities had rightly decided by reference to the law prior to the various statutory amendments in the Hindu law. He also contended that the specific case set out in the affidavit was one of separation, which is a synonym for the word "partition." There is no semblance of the contention in regard to the existence of a family arrangement. Even the concept of the family arrangement, submitted the learned counsel, has for its foundation certain rights in the parties and some disputes following them, which are settled by the family arrangement. A reference to the entry in the books of account of the assessee goes to show that it was by way of mutual settlement. Therefore, there was no case of a family settlement and the assessee's learned counsel cannot be permitted to take a ground that was never urged before the income-tax authorities. Ho placed reliance on Hukam Chand Tek Chand v. Commissioner of Income-tax, [1945] 13 I.T.R. 46 (Lah.). On the question of gift the learned counsel urged that it was never the case of the assessee that he made any gift, and, besides, as a karta of the Hindu undivided family, Tejraj had a very limited right of giving gifts and the relevant entries are significantly silent in regard to it and also the affidavit.

6. It is not disputed before us that the parties are governed by the Mitakshara school of Hindu law, unaffected by statutory enactments. No female could become a coparcener under the Mitakshara law and as such, Smt. Gatkoo Bai was not a coparcener. She was not entitled to claim partition, which right was enjoyed only by the coparceners. Even a widow-mother could not compel a partition, although she is entitled to a share equal to that of a son in the coparcenary property, in case a partition takes place at the instance of the son. Reference may be made in this connection to paragraph 316 of Mulla's Hindu Law, thirteenth edition. Partition consists of numerical division of the property, in other words, it consists in defining the shares of the coparceners in the joint property. After the shares are so defined, the parties may divide the property by metes and bounds or they may continue to live together and may enjoy the property in common as before. But, whether they do the one or the other, it affects only the mode of enjoyment, but not the tenure of the property. However, mere separation in mess or separate living does not constitute partition. Smt. Gatkoo Bai in her affidavit dated September 6, 1962, submitted before the Income-tax Officer, stated that she was living separately from her son, Tejraj, since Samvat 2014 and that there were some disputes between her and the wife of Tejraj and as such she asked for separation. She further stated in that affidavit that she separated from Tejraj on Kartik Badi 15, Samvat 2014, i.e., October 23, 1957, and got Rs. 45,000 on her separation. As indicated above, Smt. Gatkoo Bai was not entitled to ask for partition nor a partition of the joint family property could be effected at her instance. Further, it has not been stated on behalf of the assessee that Smt. Gatkoo Bai, thereafter, did not continue to reside in the joint family property and her mere separate living from Tejraj could not constitute partition. Moreover, there is no material on record to show that any account of assets and liabilities of the Hindu undivided family was prepared or that the shares were defined. Mere assertion on the part of Smt. Gatkoo Bai that she separated from Tejraj having obtained a sum of Rs. 45,000 cannot constitute a valid partition according to the Mitakshara School of Hindu law inasmuch as she, being a Hindu female, at the relevant time, had no right to claim partition of the joint family property. In Hukam Chand Tek Chand v. Commissioner of Income-tax l a partition or family settlement of the joint family property was claimed on the basis of a memorandum of partition on an one anna stamp recorded in an account book. The Lahore High Court held that:

"The memorandum of 1928 recorded in an account book was not enforceable in law and was not per se admissible to prove a partition and the finding of the income-tax authorities that the memorandum did not affect the status of the parties and there had been no partition of the property among the members of the family was one of fact."

7. In the present case also the assertion of partition is made on the basis of a mere entry in the account book of the assessee-firm, which is primarily a question of fact and has not been accepted by the income-tax authorities. Such an entry made in the account books of the assessee has no binding effect and can be ignored by the parties at any time. In the present case there is no properly executed deed of partition admissible in evidence. Thus, to our mind, the finding of the Income-tax Appellate Tribunal that there was no valid partition, appears to be correct.

8. As regards the contention of the learned counsel for the assessee that the transfer of the sum of Rs. 45,000 to Smt. Gatkoo Bai constituted a family settlement, it may be mentioned at once that no case of a family settlement was spelt out by the assessee before the Income-tax Officer- The only assertion made on behalf of the assessee before the Income-tax Officer was that Smt. Gatkoo Bai had received an amount of Rs. 45,000 on partition of the Hindu joint family. The assessee cannot be allowed to make an absolutely new case which was not urged by him before the Income-tax Officer. Further, there is no evidence on record to support the submission of the learned counsel that the aforesaid amount was transferred to the lady in lieu of her right of residence and maintenance. Smt. Gatkoo Bai is conspicuously silent in her affidavit dated September 6, 1962, as to whether after the date of the alleged settlement she was not being maintained out of the joint Hindu family funds or that thereafter she was not residing in the joint Hindu family property. She has merely stated that she was living separately from her son, Tejraj, which by no means can be understood to mean that she was not residing in the joint family property or was not being maintained out of Hindu undivided family funds. The assessment order passed by the Income-tax Officer, Pali, dated March 20, 1964, (annexure "C" on record), shows that besides transferring the sum of Rs. 45,000 to his mother, Smt. Gatkoo Bai, Tejraj also transferred during the same year a sum of Rs. 25,000 to his wife out of the Hindu undivided family funds. In her affidavit before the Income-tax Officer, Smt. Gatkoo Bai set out a case only of separation, in other words, of partition, and she did not allege that there was any family arrangement. It is also significant to notice that the entries made in the account books of the assessee showed that the amount of Rs. 45,000 was not taken away by Smt. Gatkoo Bai, but merely a transfer entry was recorded in her name and the amount was allowed to continue to remain in the Hindu undivided family-firm. This conduct on the part of Smt. Gatkoo Bai also goes to show that there was no real dispute with reference to property or a settlement of any doubtful claim. A valid family arrangement has been described in Hals-bury's Laws of England, Simond's edition, (volume 14, at page 540):

"A transaction between members of the same family which is for the benefit of the family generally, as for example, one which tends to the preservation of the family property, to the peace or security of the family disputes and litigation, or to the saving of the honour of the family."

9. The law in India in this respect is the same as in England. Reference may be made in this connection to the decision of the Privy Council in Rani Mewar Kunwar v. Rani Hulas Kunwar, [1874] L.R. 1 I.A. 157. A family arrangement is founded on the assumption that there was antecedent title of some kind in the parties and the agreement acknowledges and defines what that title was. The preservation of family peace and its property form a good basis for a family arrangement. Nevertheless, there must be a situation of a contest or apprehension of some dispute in future which is sought to be bona fide resolved by the arrangement. The essence of a family arrangement is the existence of a genuine dispute. There is no material on record that the immovable properties and business of the Hindu undivided family, thereafter, became the exclusive property of Tejraj. On the other hand, the firm continued to be assessed in the subsequent assessment years 1960-61 and 1961-62 in the status of a Hindu undivided family. There is no evidence of the existence of any genuine dispute or settlement of doubtful claims. The submission of the learned counsel for the assessee that the transfer of the aforesaid sum of Rs. 45,000 to Smt. Gatkoo Bai represented a family arrangement cannot, therefore, be accepted.

10. So far as the question of a gift is concerned, it was never submitted by the assessee before the Income-tax Officer that the transaction relating to the transfer of the aforesaid sum to Smt. Gatkoo Bai was by way of gift. Moreover, Tejraj as a karta of the joint Hindu family had a very limited right of making a gift of ancestral family property. A managing member of a Hindu undivided family, who is not the father, has power to make a gift within reasonable limits only for "pious purposes". No case of gift has been made out in the present case. We agree with the finding recorded by the Appellate Tribunal.

11. We would, therefore, answer the question referred to us in the affirmative and against the assessee with costs which we assess at Rs. 200.