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TMI Blog1977 (9) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... se, the Appellate Tribunal is justified in holding that the share income arising from the partnership firm is the income of the joint family?" The facts leading to the filing of the applications under section 256(2) of the Act are these: The assessee is a partner in Messrs. Hyderabad Gas Company, Hyderabad. The income derived by the assessee from the partnership firm as also the capital standing to his credit were being treated by the Income-tax Officer as belonging to him as "individual" and assessments were accordingly made. On December 31, 1969, the assessee abandoned his rights in the partnership firm both with regard to the capital put in by him as also the profits arising therefrom and threw the same into the common hotchpot of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hindu undivided family. According to the learned counsel, the assessee cannot make a declaration whereby the joint family would be burdened with the risk and liability of the business of the partnership firm. It is contended that the assessee by throwing his interest in the Hindu undivided family cannot burden the joint family with losses and other liabilities and, therefore, the Tribunal was in error in not treating the income realised by the assessee from the partnership firm of which he was a member as assessable in his hands as an individual. The main question to be considered is whether it is open to an assessee who happens to be the karta or a member of the Hindu undivided family to throw his interest in the partnership firm int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f assessment in point of fact, and the income which accrued could not be said to be that of a Hindu undivided family. There was nothing in the Indian income-tax law or the law of partnership which prevented the members of a Hindu joint family from dividing any asset. Such division must, of course, be effective so as to bind the members." The above view was endorsed again by the Supreme Court in Commissioner of Income-tax v. Bagyalakshmi Co. [1965] 55 ITR 660. It, thereore, follows that when once a member of the Hindu undivided family throws his interest or asset in the hotchpot, it gets blended by operation of the Hindu law and becomes an asset of the Hindu undivided family. The Tribunal was, therefore, right in holding that the Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X
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