Joint family property: acquisitions and income enabled by family funds are joint family assets, not individual self-acquired income.

House allotment, partnership share and partner salary were held to flow from joint family property where partition documents, contemporaneous accounts and application of family funds showed the immovable, capital and remuneration were enabled by joint family resources; accordingly the kothi was not self-acquired, the partnership profits derived from family-funded capital belonged to the joint family, and the contractual salary payable to the partner, being made possible by the application of joint family property, was likewise joint family income rather than the individual member's separate income.

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Issues: (i) Whether the house No. 7, Prithviraj Road (valued at Rs. 1,40,000) given to S. Bhagwant Singh on partition belonged to him in his individual capacity; (ii) Whether the share of S. Bhagwant Singh in the profits of the firm Sir Sobha Singh and Company (Builders), Nagpur, belonged to him in his individual capacity; (iii) Whether the salary of Rs. 1,500 per mensem received by S. Bhagwant Singh from the firm was income of S. Bhagwant Singh in his individual capacity.

Issue (i): Whether the house No. 7, Prithviraj Road (valued at Rs. 1,40,000) allotted/given to S. Bhagwant Singh on partition belonged to him in his individual capacity.

Analysis: The partition deed and surrounding circumstances were examined, including the fact that the joint family had been divided on 31 March 1947, the deed of partition made no specific mention of a gift of the kothi, and the father's contemporaneous books credited Rs. 1,40,000 rather than transferring the immovable as an outright individual gift. Hindu law limits a father's power to make gifts of immovable ancestral property and the evidence indicated that the credited sum created a creditor relationship rather than vesting the immovable property as self-acquired property in the son. The factual and legal indicia therefore point against treating the kothi as individually acquired immovable property of the son.

Conclusion: Issue (i) is answered in the negative; the house No. 7, Prithviraj Road did not belong to S. Bhagwant Singh in his individual capacity.

Issue (ii): Whether the share of S. Bhagwant Singh in the profits of the firm at Nagpur belonged to him in his individual capacity.

Analysis: It was found on the record that part of the proceeds of sale (over Rs.1,50,000) was invested in the partnership and that family funds were applied to enable his entry and capital participation in the firm. Under Hindu law, income derived from ventures made with the aid of joint family property is joint family income. As the capital enabling partnership participation was family property, the resulting share of profits is connected to and derives from joint family funds.

Conclusion: Issue (ii) is answered in the negative; the share of profits did not belong to S. Bhagwant Singh in his individual capacity.

Issue (iii): Whether the monthly salary of Rs. 1,500 received by S. Bhagwant Singh from the firm was his individual income.

Analysis: Although partners ordinarily receive no separate remuneration absent agreement, the partnership agreement here expressly provided for a fixed monthly remuneration. However, the right to draw that salary arose because family funds had been invested enabling him to become a partner; the salary therefore flowed from and was made possible by the application of joint family property. Under the settled rule that acquisitions made with the aid of joint family property become joint, the salary so derived cannot be treated as solely self-acquired.

Conclusion: Issue (iii) is answered in the negative; the salary of Rs. 1,500 per mensem was not income of S. Bhagwant Singh in his individual capacity.

Final Conclusion: All three referred questions are answered against the assessee and in favour of the Revenue; the income and gains in question are attributable to the joint family and are not the individual property of S. Bhagwant Singh.

Ratio Decidendi: Income or acquisition that is made or enabled by the application of joint family property is joint family property and not self-acquired by the individual member.

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