9911796707
TMI Blog1988 (11) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... nder consideration ?" Late Shri N. M Gandhi died on May 22, 1962, leaving behind his widow, Smt. Shantaben, and two minor sons, S/Shri Girish and Atul, and one daughter. At the time of his death, he was a partner in two firms, viz., Maganlal Pranlal and Sons and N. G. Paranjpe and Co., in his individual capacity as per the deeds of partnership dated September 17, 1953, and October 8, 1959, respectively. According to the deed of dissolution dated August 3, 1962, in respect of the firm, Maganlal Pranlal and Sons, the two minor sons of the deceased, Shri Gandhi, were admitted to the benefits of the partnership and the capital standing to the credit of the deceased as also the share of goodwill was transferred to the account of the minor sons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble as the income of the Hindu undivided family of late Shri N. M. Gandhi through her as manager and the returns were filed accordingly. The Income-tax Officer accepted the claim that there existed a Hindu undivided family of the widow and the two minor sons and a daughter of the deceased, N. M. Gandhi. He held that the Hindu undivided family existed not only with regard to the interest income on the aforesaid sum of Rs. 2,04,082 but also regarding all other income in the name of the widow and the two minor sons and also in respect of the interest or share of income from the two firms in which the deceased was a partner. In other words, the Income-tax Officer held that, after the death of late Shri N. M. Gandhi, his share of income in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perty, it becomes evident that all the legal heirs of the deceased, Shri N. M. Gandhi, had formed a Hindu undivided family and continued as such. Accordingly, the income attributable to the estate left by the deceased would continue to belong to the said Hindu undivided family. In this context, he placed reliance on a decision in the case of Y. L. Agarwalla v. CIT [1978] 114 ITR 471 (SC). It was contended on behalf of the assessee that the decision relied upon is not applicable in this case inasmuch as the deceased in that case was a partner as karta of his Hindu undivided family, while, in the instant case, the deceased was a partner in his individual capacity. Therefore, the provisions of section 8 of the Hindu Succession Act which were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ided family property and claimed that the interest income attributable to the said amount was assessable as the income of the Hindu undivided family. We are unable to appreciate how, from this fact alone an inference can be drawn that the distribution of the estate on the death of late Shri N. M. Gandhi was fake or sham in entirety or that the heirs of late Shri N. M. Gandhi constituted a Hindu undivided family after his death which Hindu undivided family continued as such all these years. This certainly cannot be inasmuch as the deceased was a partner in both these firms in his own right as individual and not as karta of the Hindu undivided family. The provisions of section 8 of the Hindu Succession Act, 1956, were clearly applicable. In t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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