TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Clear intention key in distinguishing joint family business from partnership</h1> <h3>Ude Singh And Sons Versus Commissioner Of Income-Tax, MP</h3> The High Court determined that the business in question was a joint family business rather than a partnership due to the absence of a partial partition of ... Firm, HUF Property, Registration Issues:Validity of partnership and registration refusal.Analysis:The case involved a joint Hindu family business that underwent a partition, with the business coming to one of the family members. Subsequently, partnership deeds were executed involving family members and the business continued under the partnership. The issue arose when the firm applied for registration, which was refused by the tax authorities on the grounds that the capital was not distributed among the coparceners at the start of the partnership business. The authorities argued that without a partial partition of the capital invested in the business, there could be no legal partnership. The Tribunal supported this view, emphasizing the absence of evidence regarding the partition of business or capital assets among the family members.The High Court delved into the concept of joint family business and partnership, citing precedents to distinguish cases where joint property was partitioned before entering into a partnership. The court highlighted that in the present case, no separate property was brought into the partnership, and the capital asset remained joint family property. Therefore, the business was deemed to be a joint family business rather than a partnership business in the eyes of the law. The court emphasized that the partnership, in this case, solely involved family members and did not involve the partition of joint property.The court rejected the argument of implied partition through the execution of partnership deeds, emphasizing the necessity of a clear intention to separate and divide assets for a valid partition. Additionally, a new argument regarding the contribution of joint family assets by the karta and skill/labour by other members to form a valid partnership was dismissed as it was not raised before the tax authorities. The court concluded that without evidence of a partial partition of assets or a clear intention to separate, the business could not be considered a legal partnership. The court's answer to the referred question was in the affirmative, upholding the refusal of registration to the firm.
TaxTMI 
TaxTMI 
