Joint family property treatment of partnership share accepted, shifting income from the individual partner to the HUF.

A partner's declaration impressing his one-sixth share in a partnership firm with the character of joint family property was treated as valid in law. Following its earlier view in similar references concerning other partners of the same firm, the Delhi High Court accepted that a partner may convert his share into Hindu undivided family property, with the consequence that income attributable to that share belongs to the HUF rather than the individual partner. The resulting income was therefore not assessable in the assessee's individual hands, and the issue was answered in favour of the assessee.

---

---

Issues: Whether the declaration impressing the assessee's one-sixth share in the partnership firm with the character of joint family property was valid in law, and whether the resulting income was assessable in the assessee's individual hands.

Analysis: The facts were treated as identical to earlier references concerning other partners of the same firm, where the Court had followed its prior view that a partner could validly impress his share in the firm with the character of joint family property. On that basis, the income attributable to such share was regarded as belonging to the Hindu undivided family and not to the individual partner.

Conclusion: The declaration was held to be valid in law, and the income from the partnership share was not assessable in the assessee's individual hands. The question was answered in the affirmative and in favour of the assessee.

---