Separate allotment of family businesses excluded their profits from joint family income despite pending partition of other properties.

Section 25A of the Indian Income-tax Act, 1922 is only a machinery provision and does not create a new charging rule or alter Hindu law. Income can be assessed as joint family income only if it was received by the Hindu undivided family as such. Where businesses were allotted to individual members, carried on separately, and treated as their individual assets, their profits could not be included in the family's total income merely because immovable properties had not yet been finally partitioned. The unpartitioned status of other assets did not justify taxing income from assets no longer belonging to the family.

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Issues: Whether, on the facts found, the profits and gains of businesses allotted to individual members on 30 July 1941 could still be included in the total income of the Hindu undivided family for the assessment year 1942-43 under Section 25A of the Indian Income-tax Act, 1922, notwithstanding that the immovable properties had not yet been finally partitioned.

Analysis: Section 25A is a machinery provision and does not alter Hindu law or create a charging rule. The relevant inquiry is whether the income sought to be assessed was income received by the joint family as such. The findings showed that the businesses were allotted to the respective members, were thereafter carried on separately, and belonged to them as individual assets, even though the immovable properties remained to be divided. There was nothing in Hindu law or in Section 25A to prevent members of a disrupted family, or members during the course of partition, from taking separate assets and treating them as their own. The section only requires that the joint family income, if received as such, be assessed as a unit; it does not authorise inclusion of income from assets no longer belonging to the family.

Conclusion: The profits of the businesses from 30 July 1941 to 20 October 1941 were not assessable as income of the Hindu undivided family. The question was rightly answered in the negative, in favour of the assessee.

Ratio Decidendi: Income from assets validly allotted to individual members and thereafter enjoyed and worked by them separately does not form part of the joint family income for assessment under Section 25A, even if other family properties remain unpartitioned.

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