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TMI Blog1965 (3) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... n groundnut decortication. Each of these two sons was said to have been carrying on such business in partnership with another person with a right to a 7/8ths share in the profits therefrom. The relevant accounts of the two sons purported to disclose losses, but the Income-tax Officer computed the profits of Ratnaswami and Ramaswami at Rs. 4,400 and Rs. 9.800, respectively. It was further held by the Income-tax Officer that the businesses were not the independent businesses of the two sons but were ventures which belonged to the assessee and were conducted by the himself. It was found that all the accounts were maintained by the in his books and that there was a free flow of funds from the assessee's business to the sons' businesses and vice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax. He points out that when the businesses according to the accounts resulted in a loss, the assessee, if the businesses were really his own, would have been fully justified in taking into account those losses for the purpose of reducing the profits in his own business. The fact that he made no attempt to do so is urged by the learned counsel to show that the businesses were really not those of the assessee, but were the separate businesses of his sons. The feature that the same premises as that of the assessee was utilised by the sons or that the assessee advanced moneys to the sons whenever required could not possibly give a different complexion to the case. We must concede that there is considerable force in the argument advanced by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, 1948. The karta of the family died after paying a portion of the penalty. Proceedings were taken by the income-tax department against the other members of the family for recovery of the balance of the penalty, and at that stage, they came to this court for the issue of a writ of prohibition. The decision of this court was that when the family had ceased to exist in January, 1946, it was not a " person " for the purposes of the Income-tax Act, in March, 1948, when the penalty was imposed. The learned judges observe that in order that the proceedings under section 28 may be validity launched and completed, in the case of a Hindu undivided family, two conditions were necessary : the family should be in existence when the proceedings are ini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate the imposition of a vicarious penalty on a person other than the one who is responsible for the offence. Mr. Balasubrahmanyan's suggestion that the decision in Raja Chettiar v. Collector of Madras would require re-consideration for the reason that the decision of the Supreme Court in Lakshminarain Bhadani v. Commissioner of Income-tax was not cited before the learned judges does not appear to us to be acceptable. Mr. Srinivasan further contends that the income in the present case was undoubtedly income which belonged to the Hindu undivided family. Reference in this regard has been made to Commissioner of Income-tax v. Palaniappa Chettiar. It is unnecessary to refer to the facts of this decision, for it has been decided in other appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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