9911796707
TMI Blog1981 (1) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... other members of the family, i. e., his two minor sons and his wife were separated and an amount of Rs. 5,000 was provided by way of provision for marriage and maintenance of the minor daughter. Though the amounts which were received by the family members of Rupchand were retained in the firm, M/s. Prabhudas Parasram, separate entries in respect of their respective amounts came to be made in the account books of the partnership firm. One of the terms of the partition deed, which is annex " B ", is as follows: "As per the scheme and the terms of partition, it was mutually agreed between the coparceners and the members of the family considering the interest of minor that after partition Shri Rupchand, son of Prabhudas, should continue to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the date of partition, i. e., Diwali 1972 " and, thus, there was an overriding title to part with the interest out of the share income of the appellant before the ascertainment of his income. The deduction of Rs. 11,424 paid as interest to other separated members of the family was thus permitted by the AAC. The matter was taken to the Tribunal by the department in two separate appeals which were decided by a common order. The Tribunal noticed the entries produced before it and held that " according to the entries produced before me, it is a clear indication that such separated or divided member was the owner of his/her share and, therefore, he/she was entitled to the interest which was received on his/her behalf by Shri Rupchand and this wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the liability so created by clause 3 of the partition deed was independent of the receipt of share income. The argument is that Rupchand could have paid interest out of any other amount and, therefore, there was no question of any overriding title in respect of any part of the share income. The contention at first blush appears to be convincing, but if the real nature of the transactions between the parties is considered, it is obvious that what is received by the assessee in the form of share income consists of two elements. The evidence referred to by the AAC and the Tribunal shows that in the books of the partnership firm, the interest which was payable to the individual members of the erstwhile joint family was credited by the partner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he real nature of the receipt, it will be no argument to say that the share income as it is received must be wholly treated as share income for the purposes of assessment. This appears to be the view which was taken by the Tribunal, when it observed that the assessee received interest for and on behalf of the other members of the erstwhile HUF. On that finding, which does not appear to us to be, in any way, erroneous in law, the only inference that can follow is that there was an overriding title in respect of the amount which was received by the assessee not on his own behalf but for and on behalf of the separated members of the erstwhile HUF as their separate income by way of interest on the amounts lying with the partnership firm. If thi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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