9911796707
TMI Blog1980 (4) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... s a partial partition in the family as a result of which 1/4th share in the said firm was divided equally between five members of the family, each having 1/5th share. A memorandum of partition was drawn up on 8th November, 1966, according to which the capital standing to the credit of the family in the books of the said firm was also divided into five shares and thence-forward the amounts which fell to the shares of the four members other than Shri Ram Narain were treated as loans from them. Shri Ram Narain made an application for recognition of this partition under s. 171 of the I.T. Act, 1961 (hereinafter referred to as " the Act ") to the ITO. This application was made during the proceedings for the assessment year 1967-68. The ITO recog ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee had agreed to share the income of the firm as a result of partial partition, there was a sub-partnership between them. Therefore, the share of Shri Ram Narain, his wife and three sons were assessable in the hands of Shri Ram Narain under s. 64 of the Act. The contentions of the revenue were repelled by the Tribunal. The Tribunal came to the conclusion that the proper status of each assessee for the purpose of assessment for both the assessment years under reference was that of an individual. The Tribunal negatived the arguments of the departmental representative that there came into existence a sub-partnership in regard to the share income of the firm. The Tribunal also held that the ITO was not competent to assets the assessee in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... treated as loans to the firm. Shri Awasthy has challenged this finding of fact and has contended that the reading of the deeds of partition would show that the capital of the HUF was never shown as loan in the name of the firm. This contention is without any merit. This fact has been mentioned in the statement of the case and so also a finding has been recorded by the Tribunal in its order dated 7th December, 1973. If this statement of fact was not correct, it was for the revenue to have objected to this statement of fact being incorporated in the statement of the case, but no such objection was taken at any stage. It is a fundamental principle of the law of partnership that the relation of partnership arises from contract and not from stat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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