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Issues: (i) Whether the business carried on in the name of "Chandmull Rajgarhia" was assessable as the assessee's individual business or as joint family business; (ii) Whether the utilisation of joint family funds in that business was sufficient, by itself, to establish blending and convert the business into joint family property.
Issue (i): Whether the business carried on in the name of "Chandmull Rajgarhia" was assessable as the assessee's individual business or as joint family business.
Analysis: The business was started in the individual name of a coparcener, and the earlier claim that it had been set up with joint family capital was found to be displaced by the agreed position emerging from the disclosure proceedings. The existence of joint family funds in other sources did not create a presumption that a newly started business in the name of an individual member belonged to the family. In such a case, the primary presumption remains that the business is the member's own unless a contrary case is proved.
Conclusion: The business was held to be the assessee's individual business, not the joint family business.
Issue (ii): Whether the utilisation of joint family funds in that business was sufficient, by itself, to establish blending and convert the business into joint family property.
Analysis: Mere use of joint family money in an individual business does not amount to blending. A conversion of separate property or separate business into joint family property requires a clear intention to abandon exclusive rights in favour of the family estate, and such intention may be inferred only from relevant circumstances. On the facts found, there was no material showing any such intention during the relevant period, and the later partition decree could not affect the assessment year in question.
Conclusion: The utilisation of joint family funds, by itself, did not establish blending or alter the character of the business into joint family property.
Final Conclusion: The reference was answered against the assessee, the business retained its individual character for the relevant year, and the Revenue's view of assessability was upheld.
Ratio Decidendi: A business started and carried on in the name of an individual coparcener is not presumed to be joint family business, and mere introduction or utilisation of joint family funds does not convert it into joint family property unless a clear intention to abandon exclusive ownership in favour of the joint family is shown.
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