9911796707
TMI Blog1950 (1) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... It is necessary to state briefly the facts which have given rise to the question of law involved in the case. The assessee Veerappa Chettiar was the junior member of a Hindu undivided family carrying on money-lending business in Colombo, the manager of the family being his elder brother, Pethaperumal Chettiar. The two brothers separated under a partition arrangement evidenced by a registered document dated 19th June 1938. Under this partition arrangement, the elder brother, Pethaperumal Chettiar, took over the entire assets of the Colombo business consisting of its properties, out-standings and the profits that had been earned by the business till then and agreed to pay to his younger brother Veerappa Chettiar, the assessee, a sum of ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further appeal before the Tribunal the finding of the Appellate Assistant Commissioner was reversed and the sum of ₹ 36,182/- was held to be liable to tax. The Tribunal relied for its conclusion on a decision of this Court reported in Commissioner of Income tax, Madras v. Annamalai Chettiar AIR1944Mad398 . 3. It is argued by the learned Advocate-General for the assesses that the conclusion of the Appellate Tribunal is erroneous and that the decision in Commissioner of Income tax, Madras v. Annamalai Chettiar AIR1944Mad398 is distinguished from the present case, if not incorrect. It is contended on behalf of the revenue authorities by Mr. Rama Rao Sahib that the accounts of the joint family business prior to the date of the partition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is share of the profits. The interest of each partner is a definite and individual interest of his own, and as soon as the profits are declared, there is an obligation on the put of the firm to pay over to each of the partners his share of the profits. Again, in the case of a partnership the drawings of each of the partners would be debited to his account and set-off against the profits declared each year as and for his share and the balance left over, if any, would be paid to him. The account taken on the dissolution of a firm ascertains what is due to the partners for profits and what is due for capital. The sum due to a partner for undrawn profits necessarily remains a debt due by the partners to the partner who has not drawn his share a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of the family to render an account in respect of his past transactions and dealings with the family properties, except when the manager has been guilty of fraudulent malversation or secretion of family funds. On a partition all that a member can claim is an allotment of his proper share of the family estate with reference to the existing assets and the number of coparceners and this allotment may be made in meal or in malt. One sharer may get the landed properties of the family for his share, another may get the outstandings and a third member may get the cash and movables. What is divided at a partition, is the entire family estate consisting of the original family estate with all subsequent accretions to that estate in the shape of inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee either in law or under the terms of the partition deed now in question. Indeed the allotment of money to the assessee might have been made entirely out of capital. 6. With reference to the case relied upon by the Tribunal Commissioner of Income Tax. Madras v. Annamalai Chettiar AIR1944Mad398 , it may be stated that it was the converse of the present case. There the assessee was the person who took over the entire assets of the money-lending business including the outstandings and the profits that had accrued up to the date of partition. Thereafter, he brought into British India certain sums of money which were taxed as the accumulated profits of the business in his hands before the date of partition. It may be that the assessee in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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