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TMI Blog2001 (7) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... n the hands of the partner to whom the property belonged?" The dispute relates to the assessment year 1974-75. The factual position which is almost undisputed is as follows: The assessee is a Hindu undivided family (in short 'the HUF"), which owned a house property which was partly used by a firm in which the assessee family itself was a partner. It was claimed by the assessee that income from the property should not be assessed in its hands as it was used by the firm, and the business was carried on by the firm which also included the assessee itself. This plea was not accepted by the Assessing Officer as well as by the first appellate authority. On further appeal, the Tribunal came to hold that the Department was not justified in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is to be noted that several High Courts have taken a view different from the one expressed by the Karnataka and Allahabad High Courts in the two cases noted above. They are CIT v. Rasiklal Balabhai [1979] 119 ITR 303 (Guj); CIT v. K. M. Jagannathan [1989] 180 ITR 191 (Mad) and CIT v. Shri Champalal Jeevraj [1995] 215 ITR 289 (Mad). In Rashiklal's case [1998] 229 ITR 458, the apex court was dealing with section 40(b) of the Act. A Hindu undivided family being a fluctuating body of individuals cannot enter into a partnership with other individual partners. It cannot do indirectly what it cannot do directly. If the karta or any other member of the Hindu undivided family joins a partnership, he can do so only as an individual. His rights and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties of the partners. A partner may be the karta of a joint Hindu family, he may be a trustee, he may enter into a sub-partnership with others, he may, under an agreement, express or implied, be the representative of a group of persons, he may be a benamidar for another. In all such cases he occupies a dual position. Qua the partnership, he functions in his personal capacity, qua the third parties, in his' representative capacity. A Hindu undivided family is not a juristic person for all purposes, and cannot enter into an agreement of partnership with either another Hindu undivided family or individual. It is open to the manager or karta of a joint Hindu undivided family as representing the family to agree to become a partner with another p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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