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TMI Blog1992 (1) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... f partner, Ramanlal, from the partnership firm, Messrs. Nahalchand Dhanjibhai and Co., during the previous year under consideration were not clubbable with the share income derived by Ramanlal from the said firm if that share income was taxable in Ramanlal's hands in his capacity as karta of the smaller Hindu undivided family ?" At the assessee's instance : " (3) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the share income derived by partner, Ramanlal, from the partnership firm, Messrs. Nahalchand Dhanjibhai and Co., during the previous year under consideration was to no extent taxable in the hands of the larger Hindu undivided family comprising Ramanlal, his wife and their major son Jayantilal, their minor sons Rajendrakumar and Dilipkumar and their minor unmarried daughters ?" The assessee, Ramanlal, in the return filed by him for the assessment year 1972-73, claimed that the share income derived by him from the partnership firm, Messrs. Nahalchand Dhanjibhai and Co., was taxable in his hands as karta of the smaller Hindu undivided family consisting of himself, his wife and two unmarried daughters. By ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at, after partition of the capital invested in the firm of Messrs. Nahalchand Dhanjibhai, the assessee became the owner of the reduced investment in the new firm in his individual capacity and that the said fact warranted the assessment of the share income in the assessee's hands as an individual. The matter was carried to the Tribunal by the assessee. The Tribunal found that, from the new partnership deed dated November 24, 1970, it was clear that the partition in question had taken place in respect of the business of the respective Hindu undivided families of Ramanlal and Rasiklal and, therefore, it could be correctly inferred that the right to share the profits from the firm also stood partitioned. In this view of the matter, the Tribunal held that it was not possible to accept the assessee's contention that the assessee's larger Hindu undivided family's right to a share in the profits of the firm remained undivided and intact in spite of the partial partition of the capital amount as recorded by the Income-tax Officer. The Tribunal further held that, on the date of the partition, Ramanlal constituted a Hindu undivided family along with his wife and unmarried daughters even thou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. CWT [1969] 74 ITR 190, where the assessee had obtained the property on partition of joint family property with his brother. The assessee was, thereafter, the sole coparcener living with his wife and two daughters and it was held, following the decision of the Supreme Court in Gowli Buddanna v. CIT [1966] 60 ITR 293, that even though there was only a single coparcener living with his wife and daughters, he was liable to be assessed as a Hindu undivided family as the property which came to his share was earlier held by the coparceners of a Hindu undivided family. In Gowli Buddanna's case [1966] 60 ITR 293 (SC), the property was originally owned by coparceners and, on the death of one of them, it devolved on the sole surviving coparcener who was living with his mother and two sisters. It was held that the character of the property as Hindu joint family property did not change notwithstanding the temporary reduction in the number of coparceners. It, thus, appears to be the settled legal position that, where the property was originally owned by coparceners and later devolved on a sole surviving coparcener as also where such property on partition came to be allocated to a single copar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the assessee, and (2) where the property already impressed with the character of joint family property comes into the hands of the assessee as a single coparcener and the question required to be considered is whether it has retained the character of joint family property in the hands of the assessee or is converted into the absolute property of the assessee. In cases where the property was not owned by a Hindu undivided family before partition and, on partition, the properties are held by a coparcener living with female members who are entitled to maintenance, the assessment has to be made as an individual, the reason being that before it got converted as joint family property, it was not owned by coparceners of a Hindu undivided family. Such a conversion as joint family property occurred for the first time in the hands of the sole surviving coparcener by reason of a gift by the father as in Kalyanji's case [1937] 5 ITR 90 (PC), and by reason of the sole coparcener throwing his separate property into the common hotchpot as in Chhabda's case [1975] 101 ITR 776 (SC). In the instant case, admittedly, the property that was obtained by the assessee-coparcener at the partition was p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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