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Issues:
- Validity of family arrangement and partnership claimed by the assessee. - Treatment of income of the business as income of the Hindu undivided family. Analysis: The case involved the conversion of a Hindu undivided family business into a partnership business between S.R. Kalani and his adoptive mother, Smt. Badamibai. Initially, the assessee claimed a partial partition and subsequent partnership, but later shifted the claim to a family arrangement due to legal constraints. The Income-tax Officer rejected the claims, which were upheld in subsequent appeals. The Tribunal found discrepancies in the story presented by the assessee, noting that Smt. Badamibai was being maintained out of family funds, making the maintenance claim dubious. The Tribunal observed inconsistencies in the reasons given for the alleged family arrangement, such as disputes between family members and Smt. Badamibai's age and lack of business acumen. The Tribunal concluded that the capital contribution by Smt. Badamibai was not genuine, and the partnership was fictitious. The Tribunal's decision was based on substantial evidence and considerations of the material on record. The Tribunal had the authority to investigate the genuineness of the partnership despite the formal partnership deed. The Tribunal also considered the subsequent conduct of Smt. Badamibai, finding no new material presented for the assessment years in question. Consequently, the Tribunal's decision was consistent with the earlier findings and did not overlook any relevant material. Therefore, the High Court affirmed the Tribunal's findings, ruling in favor of the Revenue and against the assessee. The Court held that the Tribunal's conclusions were well-founded, supported by evidence, and not based on mere suspicion or surmises. The Court also noted that the assessee failed to provide compelling evidence to substantiate the claims made regarding the family arrangement and partnership. Consequently, the Court upheld the decisions of the Tribunal, denying the claims of the assessee and directing each party to bear their own costs in the matter.
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