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        Case ID :

        1955 (9) TMI 70 - SC - Indian Laws

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        No presumption of joint family business arises from a father's name alone; evidence must show the contract was for the family. Under Hindu law, no presumption arises that a business or contract standing in the name of a coparcener's father is joint family property merely because ...
                        Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
                          Provisions expressly mentioned in the judgment/order text.

                              No presumption of joint family business arises from a father's name alone; evidence must show the contract was for the family.

                              Under Hindu law, no presumption arises that a business or contract standing in the name of a coparcener's father is joint family property merely because he is the manager or father of the coparceners. Liability of sons for debts incurred by the father in a newly started business does not, by itself, convert that business into a joint family concern. The Tribunal's approach was based on an incorrect legal presumption and it failed to examine the evidence on whether the contract was entered into on behalf of the joint family. The matter was therefore remitted for determination on the evidence whether the contract was for the joint family or the father's personal benefit.




                              Issues: Whether a business or contract standing in the name of a coparcener's father is presumed in law to be joint family business, and whether the finding that the contract was entered into on behalf of the joint family could stand without a fresh consideration of the evidence.

                              Analysis: Under Hindu law, there is no presumption that a business standing in the name of a family member is joint family business merely because that member is the manager or even the father of the coparceners. The liability of sons for debts incurred by a father in a newly started business does not make the business itself a joint family concern. The Tribunal had proceeded on an erroneous view of law and had not examined the evidence bearing on whether the contract was entered into on behalf of the joint family.

                              Conclusion: The legal presumption relied on by the Tribunal was rejected, and the matter was sent back for a decision on the evidence as to whether the contract was entered into on behalf of the joint family or for the father's personal benefit.


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                              ActsIncome Tax
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