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TMI Blog1972 (4) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... m part of the subject-matter of the said partition. But by a partnership deed dated March 27, 1959, the business was converted into a partnership business between Pukharaj, and Mohanraj with effect from April 1, 1959. On that date Pukharaj transferred a sum of Rs. 61,311 from his capital account to his son's account as representing his son's share capital in the partnership business. The Gift-tax Officer took the view that by converting his individual business into a partnership business and by admitting his son as a partner, Pukharaj had made a gift of not only the said sum of Rs. 61,311 but also the half share in the goodwill of the business. He therefore issued a notice under section 13(2) of the Gift-tax Act (hereinafter referred to as " the Act ") calling upon Pukharaj to file a gift-tax return. But, Pukharaj died on May 3, 1961, without filing the return. On a further notice under section 15(4) of the Act to his son, Mohanraj, he stated that the business run in the name of Shah Pukharaj Mohanraj was a joint family business, that by converting this joint family business into a partnership business, Pukharaj cannot be said to have made any gift in his favour and that, therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business in question for a long time, and that the proximity of time between the partition of the joint family properties and the constitution of the partnership indicated that the constitution of the partnership was part and parcel of the partition arrangement of the joint family properties. From these facts, it proceeded to draw a presumption that the business in question was in fact started by Pukharaj from and out of the joint family nucleus and that the business would therefore partake the character of a joint family property and that the only evidence by which the revenue seeks to rebut this presumption that the income from the business had all along been assessed in the hands of Pukharaj in his individual capacity was not sufficient, especially as Pukharaj himself did not object to his being assessed in the status of an individual as regards the income from the said business and sought to be assessed in the status of an undivided Hindu family in respect of the same. The Tribunal ultimately held that the business in question was the joint family concern of Pukharaj and his son, and that by converting the business into a partnership and by allotting a half share in the busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch as with its aid the property in question could have been acquired. And, it is only after the possession of an adequate nucleus is shown, the onus shifts on to the person who claims the property as self-acquisition affirmatively to make out that the property was acquired without any aid from the family estate. " At page 363 : " Whether, in the case of a joint family possessed of some joint property, there is or is not a presumption that any property in the hands of an individual member is not his separate individual property, but joint property, no such presumption can be applied to a business. Unless the business of a coparcener grew up from joint family property, or that the earnings were blended with joint family estate, they remain free and separate. The question whether the business was begun or carried on with the assistance of joint family property or as a family business is a question of fact upon which the initial burden of proof lies upon those who claim a share in the business. " Reference is also made to Annamalai v. Subramanian where the Judicial Committee has stated : " A member of a joint undivided family can make separate acquisition of property for his own b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aims that the business was exclusively owned by a coparcener. Whether the evidence adduced by the assessee was sufficient to shift the burden which initially rested on him of establishing that there was sufficient nucleus out of which the business could have been started by his father, Pukharaj, is one of fact depending on the nature and the extent of the nucleus. This is clear from the decision in Srinivas Krishnarao Kango v. Narayan Devji Kango. Therefore the important thing to consider here is the income which the joint family nucleus could have yielded. Admittedly, Pukharaj, the assessee's father, came to Coimbatore 30 years ago and started the business. The properties divided under the partition deed dated February 25, 1959, between the assessee and his father consisted of two houses and a shop building and a vacant site apart from gold and silver ornaments. The Tribunal has considered these properties as forming sufficient nucleus to enable the assessee's father to start the business, and we find that the inference drawn by the Tribunal as to the sufficiency of the nucleus cannot be said to be vitiated in any way. Therefore, we are not inclined to differ from the finding arri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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