Joint Family Property Characterisation: mere possibility of business losses did not raise a question of law for reference.

A coparcener's declaration that his partnership share was impressed with the character of joint family property was not shown to be legally barred merely because the family might also bear business losses. No rule of Hindu law or general law was identified to support the contention that a possible exposure to losses prevents such impressing of property. On that basis, no question of law was found to arise for reference under Section 256(2) of the Income-tax Act, 1961, and the reference petition was rejected.

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Issues: Whether, on the facts and in the circumstances of the case, any question of law arose for reference under Section 256(2) of the Income-tax Act, 1961 on the assessee's declaration impressing his partnership share with the character of joint family property.

Analysis: The assessee had declared on 1 April 1968 that his share in the partnership firm stood impressed with the character of joint family property. The only contention that could support the proposed reference was that the share could not be so impressed because the family might also bear the risk of losses in the business. No legal proposition in Hindu law or general law was shown to support the view that a mere possibility of losses disables a coparcener from impressing property with the character of joint family property.

Conclusion: No question of law arose for reference, and the petition under Section 256(2) was rejected.

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