9911796707
TMI Blog1987 (6) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... ako Bai, wife of late Chandmal Chunilal, became a partner along with three sons S/Shri Rakeshchand, Kevalchand and Kiranraj. The amount standing to the credit of late Chandmal Chunilal, who was assessed as an individual, was credited in an account in the firm under the style ' estate of late Chandmal Chunilal '. Sri Chandmal Chunilal left behind a married daughter Smt. Saroj, who did not join the reconstituted firm. To the account styled ' estate of late Chandmal Chunilal ' interest was credited, A question arose as to whether four-fifth of the interest so credited (i.e., excluding what would have been the share of Smt. Saroj) required to be added in the hands of the firm by virtue of section 40(b) of the IT Act, 1961. 3. The contention o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndmal had an immovable property. It is gathered that the legal heirs did not see eye to eye with each other on the distribution of the estate of Shri Chandmal and cases have been filed in the Court to settle their interest inter se. That is the reason why the amount left behind as capital in the firm had remained undistributed over the legal heirs. In short, the amount did not belong to the legal heirs till a distribution had taken place. Till then it belonged to an estate. The amount of interest paid by the firm was not to the partners. It was paid to the estate which consisted of not only the partners but the daughter of the deceased also. In this view therefore I hold that section 40(b) of the Act cannot apply. The appellant would succee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally to the account of any partner. Credit to a joint account could never be construed to be a credit to a partner. For all these reasons he pleaded for the upholding of the deletion made by the CIT(A). 7. We have considered the rival submissions of the parties. In the Chapter on ' Intestate Succession ', the following appears at page 921 of Hindu Law - Mulla, 15th edition (1982) : " Inheritance never in abeyance :---- One governing principle of Hindu Law is that inheritance can never be in abeyance. On the death of a Hindu the person who is then his nearest heir or persons who are then his nearest heirs and as such succeed simultaneously to his property, become entitled at once to the property left by him. The right of succession vests ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - Heirs who succeed together to the property of an intestate as envisaged in this section and the earlier relevant provisions of the Act are obviously entitled to all the rights and subject to all obligations of persons who are tenants-in-common. In a tenancy in common each sharer has an independent share in the common property and ordinarily cannot act for the others or assume the authority of a manager unless so appointed by all the others. Thus for instance one of several female heirs who are covenants cannot alienate the property held as co-tenants though, of course, in a given case the Court may as far as possible try to protect the interest of the alienee on equitable considerations. A co-owner, as such, it has been held in the contex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lay it down in an authoritative or definitive fashion. Parliament has not attempted a definition. And, if we may adopt a saying of Lord Reid, judges should not rush in where the Legislature has feared to tread. All we have attempted here is to mark the distinction between an AOP and a BOI, by reference to certain broad features of each. It is needless to say that it would be a matter for the IT authorities as well as the Tribunal and the Courts to consider the facts in each case to find out if any given group of people are to be regarded as 9, BOI or not. The individuals concerned may have something or other in common which brings them together with reference to an income or its source. It may be common intention ; it maybe a common activi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r share, which if conceded, would have resulted either in the disruption of the business or in its disposal. Nothing of this kind, however, happened in this group. That the integrity of the business continued with not one of them wishing to take his or her share and depart seems to us to be itself a clear indication that mother and children who had fallen in line at the death of Perianna Pillai were still keeping in step and minded to keep in step, as a BOI. One might easily play up the blood relationship between these individuals in order to rule out any voluntary association between them. But the absence of an agreement or arrangement between them would only make them into something less than an AOP. The point, however, is whether that wo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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