9911796707
TMI Blog1962 (7) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... ector of Coimbatore from bringing these properties to sale for realisation of the income-tax arrears due. The facts are the following. One Palaniappa Mudaliar was doing hardware business in Erode from 1920. He prospered in the business and purchased many properties including all the properties now in suit. He died in 1937, leaving his widow, the 3rd plaintiff, and eight children. The first plaintiff was the fourth son of Palaniappa and his sons are the 7th and 8th plaintiffs. It is said that the first two sons of Palaniappa were majors at the time of his death in 1934, and they started a lorry business, yarn business, tapioca business and also did contract work under military authorities and they also started a wirenail business. It is t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addition by the final decree a sum of Rs. 4,000 was directed to be provided for the marriage expenses of the 6th plaintiff and a charge was given on all the properties items Nos. 1 to 21 for payment of this marriage provision. Two main questions arose for consideration by the learned subordinate judge. The first was whether the business started by the adult members of the family after the death of Palaniappa Mudaliar were not joint family businesses and consequently, whether the assessments of income-tax on the profits of those businesses were not payable by the present plaintiffs. The second question was whether the suit as such was barred by section 67 of the Indian Income-tax Act. The learned judge answered both these questions again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estion in the negative the Bench reviewed the entire case law on the subject and pointed out the distinction between trading families and non-trading families in regard to this matter. The law being well settled, we must hold, agreeing with the subordinate judge, that the starting of new businesses like wire-nail business, lorry business topioca business and yarn business by the adult members of the family was a venture which were entitled to start as joint family ventures with the result that the loss of those ventures were would be binding on the minor members of the family. It is nowhere suggested nor established by the evidence that any of these ventures were speculative in character. Counsel attempted to show that these new ventures ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... joint family businesses. If the appellants were well advised they could have moved the income-tax authorities under section 23 and section 25A which make provision for a claim made on behalf of a member of a Hindu family on the ground that the assessment should not proceed as though the family was undivided. If such a claim had been made to the income-tax authorities, it was their duty to investigate the claim and record an order embodying their conclusion. Failing that, the appellants could have at least asked for a prayer in the partition suit, O. S. No. 92 of 1948, on this question impleading the tax authorities as parties to the suit. Not having done this, the mere fact a partition is effected in pursuance of the preliminary decree in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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