Joint family funds and income character: partnership profits and managing partner salary were treated as family-linked, not separate income.

Property or remuneration acquired with the aid of joint family funds retains the character of joint family property and cannot be treated as the coparcener's separate income. The alleged partition gift was not established as an individual acquisition because the partition deed contained no such transfer and the surrounding circumstances indicated only a money credit, not a personal grant of the house. The partnership profits were also treated as joint family income because the capital used to enter the partnership came from joint family funds. The monthly salary paid as managing partner likewise flowed from that family-backed partnership interest and was not separable as individual income.

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Issues: (i) Whether the property or amount said to have been given to the assessee on partition belonged to him in his individual capacity; (ii) whether the assessee's share in the profits of the partnership at Nagpur belonged to him in his individual capacity; (iii) whether the monthly salary received from the partnership was income in his individual capacity.

Issue (i): Whether the property or amount said to have been given to the assessee on partition belonged to him in his individual capacity.

Analysis: The alleged extra share was found not to be a separate personal acquisition. The partition deed did not mention any such gift, the karta had no power after partition to make the transfer in the manner asserted, and the surrounding circumstances showed that the real transaction, if any, was only a credit of money and not a personal grant of the house itself. The assessee therefore did not acquire an independent title to the property in his individual capacity.

Conclusion: The issue was answered against the assessee.

Issue (ii): Whether the assessee's share in the profits of the partnership at Nagpur belonged to him in his individual capacity.

Analysis: The investment that enabled the assessee to enter the partnership came from joint family funds. Income earned through the use of joint family property is impressed with the character of joint family property. Since the partnership share arose from the capital so employed, the resulting profits could not be treated as the assessee's separate income.

Conclusion: The issue was answered against the assessee and in favour of the Revenue.

Issue (iii): Whether the monthly salary received from the partnership was income in his individual capacity.

Analysis: The salary was payable only because the assessee became a partner through the use of joint family funds and was obliged to work as a managing partner under the partnership arrangement. The right to receive remuneration flowed from the partnership interest obtained with joint family aid. In such circumstances, the remuneration was not separable from the joint family source that made it possible.

Conclusion: The issue was answered against the assessee and in favour of the Revenue.

Final Conclusion: The reference was decided wholly in favour of the Revenue, with the assessee held not entitled to treat the disputed property, partnership profits, or salary as his separate income.

Ratio Decidendi: An acquisition or remuneration obtained with the aid of joint family property retains the character of joint family property or income and cannot be treated as the individual income of the coparcener.

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