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TMI Blog1982 (8) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... u undivided family of which he is the karta ? " The reference relates to the assessment to income-tax for the assessment year 1974-75. Originally, a certain Sri N. R. Satyanarayana Shetty was assessed in the status of and as representing a " HUF whose income included the income received by the said Satyanarayana Shetty as partner in a firm carrying on business under the name and style " M/s. Sri Balaji Jaggery Trading Co., Mandya ". It is not disputed and is indeed a common ground that Satyanarayana Setty was a partner in the said firm in his capacity as the karta of the joint family and, accordingly, the income in his hands received as partner of the said firm was includible in the income of the HUF for the earlier assessment year. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rued the declaration made by the assessee on May 27, 1973, as amounting to an attempt at blending Shankara Shetty's share and interest in the firm, which was otherwise his separate property, with the character of a joint family property and held that such a blending, having regard to the nature of the interest of a partner, involving as it did the risk of loss, was not permissible in law. He, accordingly, treated Shankara Setty's income as partner of M/s. Sree Balaji Jaggery Trading Co. as his individual income and made an order dated March 18, 1977, accordingly. Aggrieved by this, the assessee preferred an appeal to the Appellate Assistant Commissioner. Before the appellate authority, it was urged for the assessee that there was no ques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pointed out that the share income was credited to the account of Sri Shankara Shetty in the books of the firm, even though there was a separate katha for the HUF indicating that the share income was the individual income of Shankara Shetty. The Tribunal did not accept the contentions urged for the Revenue and dismissed the appeal. Thereafter, an application was made by the Revenue under s. 256(1) of the Act seeking a reference of the following four questions, said to be of law and to arise out of the appellate order of the Tribunal for the opinion of this court : " (1) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in holding that the status of the assessee is a HUF and not an individu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Srinivasan says that if that be so, the share income from the firm is the income of that larger family consisting of Shankara Shetty and his branch, his mother and his unmarried sisters. But the declaration dated March 27, 1973, made by Shankara Shetty, so proceeds the argument, would say that the income is to be treated as that of the family consisting of himself and his branch alone, leaving out his mother and unmarried daughters which would mean that the income is claimed to be that of a smaller branch of the family or a sub-family. It is, accordingly, contended that as, admittedly, no nucleus for the partnership interest came from this smaller family nor was there any detriment to its estate, the income could not be that of the branch. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further subtle distinction, Sri Srinivasan now seeks to make, as to the existence of a further alternative as between a larger family and a smaller branch was never in the contemplation of the ITO. It is no doubt true that there is some discussion by the Tribunal as to the said share income having been impressed with the character of joint family property. This discussion was wholly unnecessary. It appears to us that the declaration dated May 27, 1973, does not admit of the understanding that the partnership interest was, otherwise, the individual asset of Shankara Shetty and that by that declaration the latter sought to impress that asset with the character of a joint family property. That declaration meant nothing more than that that Sha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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