9911796707
TMI Blog1994 (4) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... mstances of the case, the Tribunal was correct in holding that the share income was to be excluded to the extent of one anna only after November, 1971, and not from the beginning of the year? " The respondent is the Revenue. We are concerned with the assessment year 1972-73. The accounting period ended on December 31, 1971. The assessee was a two annas partner in the firm, West Bengal Mining Company. She executed a trust deed dated March 23, 1971, settling Rs. 4,01,000 out of her capital standing in the firm on the trust. In the year, 1971, it was decided that there should be a sub-partnership between Smt. Sulochana Devi Nathani and the trust by which two annas share in the firm was to be shared by herself and the trust. The Income-tax Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the end of November, 1971, would belong to the trust and the assessee equally and not from the beginning of the year. The deed of trust dated December 31, 1971, between Smt. Sulochana Devi Nathani and the trust specifies that the document came into effect from January 1, 1971. But it is further seen that practically the trust had come into existence in November, 1971, but the partnership deed was actually executed in December, 1971. Counsel for the assessee argued that the income of the sub-partnership (consisting of Smt. Sulochana Devi Nathani, the assessee, and the trust) having come into existence admittedly in November, 1971, the profit, which accrued to the firm by the end of the year, 1971, should be shared equally between the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ub-partnership arises only subsequent to November 26, 1971. Thus, till this date, i.e., November 26, 1971, what al1 income was earned by her in the firm was earned in her individual capacity and if she relinquished her rights to the extent of 50 per cent. in it that would amount to application of income and the total income earned till this date is liable to be taxed in her hands. After this date, the income receivable by Mrs. Nathani from the firm becomes the income of the sub-partnership and she is liable to be assessed only on her share of income from the sub-partnership. " The Appellate Assistant Commissioner has found in the assessment relating to the firm and the registration thereof that Smt. Sulochana Devi Nathani was the full-fled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Income-tax Appellate Tribunal was justified in holding that the income of Smt. Sulochana Devi Nathani would be governed by the sub-partnership, which came into existence at the end of November, 1971, and there was no diversion of 50 per cent. share income of the said firm at source from the beginning of the year, 1971. We answer question No. 1, referred to this court, in the affirmative, against the assessee and in favour of the Revenue. We answer question No. 2, referred to this court, also in the affirmative against the assessee and in favour of the Revenue. The reference is answered as above. A copy of this judgment shall be forwarded to the Income-tax Appellate Tribunal, "A" Bench, Patna, under the signature of the Registrar and th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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