9911796707
TMI Blog1980 (3) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... rence may now be briefly stated. Dr. Gurbux Singh, the respondent-assessee, was being assessed as an individual for the assessment years 1942-43 to 1961-62. He was being so assessed in respect of his salary income, property income, dividend income and interest income. The present reference relates to the assessment year 1962-63, for which the previous year ended on March 31, 1962. During the proceedings for this year, the assessee put forward a claim that all the above items of income, except salary, i.e., the property, dividends and interest was really the income of the HUF, consisting of himself, his wife and his son, Shri Jarnail Singh, who had been born in 1955. This claim, which had not been put forward in the early years, was not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xi Co. In 1940, M/s. Shenogi Co. expressed their intention of establishing their own sales organisation in India and their unwillingness to renew the agency agreement. Thereupon, it is said that by an agreement dated May 20, 1940, the business of M/s. Ranbaxi Co. was sold to M/s. Shenogi Co., as a running concern, one of the terms of the agreement being that Jaswant Singh and Ranjit Singh should be employed by the purchaser for a period of 20 years. However, within a short period of two months, on July 6,1940, the Japanese concern sold back the business of M/s. Ranbaxi Co., to the assessee. For this, the assessee had to pay only a nominal consideration of Rs. 1,000 but he had to undertake the vendor's obligation to Ranjit Singh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onged to the joint family. The ITO rejected the assessee's claim principally for the reason that the claim had not been put forward in earlier years. He also perhaps found it a little suspicious that the claim had been put forward in a year when a substantial amount of capital gain came to the assessee. According to the ITO, Dr. Gurbux Singh must have been deriving some professional income. That apart, he had acquired the business of selling agency for small sum of Rs. 1,000 which must have come out of his individual earnings. The business needed no capital investment and by his own personal efforts, Dr. Gurbux Singh built up the business. He accumulated capital of Rs. 9,000 by 1944. Though a, claim had been made in the assessment year 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which the selling agency was obtained are not available on record it is clear that the assessee went to Japan with the help: of joint family funds. Thirdly, between 1940, when the business of M/s. Ranbaxi Co., was taken over by the assessee, and 1947, by which time the business became very prosperous, substantial amounts belonging to the family had been channelled into the business. The first of these was a sum of Rs. 29,981, realised by the sale of family jewellery in June, 1944. This fact was proved by reference to the original document before the Tribunal. In November, 1940, a sum of Rs. 20,187 was transferred to the assessee's bank account from the bank account of the father. Thirdly, in 1946, the father sold certain lands and the sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the assets as well as the income were not derived by detriment to the joint family assets is based on no evidence. We are, however, of the opinion that the conclusion of the AAC and the Tribunal are fully supported by the material on the record. Their conclusion is essentially a conclusion of fact. We are unable to agree with the contention of the learned counsel for the applicant that the Tribunal has misdirected itself or has arrived at a perverse conclusion which cannot flow from the established facts. There is no direct evidence regarding the state of affairs when the business of M/s. Ranbaxi Co. started was either originally or on July 6, 1940, when it was taken over by Dr. Gurbux Singh. However, with regard to this amount, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were also invested in the business. The conclusion of the ITO that the gift of sale proceeds would be an individual gift in favour of Dr. Gurbux Singh would not be correct. There is no finding that Shri Mool Singh had any assets of his own. As pointed out; initially all the assets, in the hands of Shri Mool Singh, belonged to joint family of himself and his son. Now, these assets were slowly transferred and put into the business. It is also very clear that the business could not have taken such leaps and strides after its initial slow progress but for the utilisation of these funds belonging to the family to improve its position. There is no dispute that all the assets, which are presently in question, were acquired out of the proceeds of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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