Partnership profits taxed in individual hands where books and conduct showed the venture was held for the firm.

A partnership interest may be treated as held for a firm where the surrounding conduct and accounting records show an agreement to that effect, even if no bilateral written agreement exists. Here, the books of account and the consistent treatment of both profits and losses in the common profit and loss account supported the inference that the assessees joined the three mill partnerships on behalf of Messrs. Valiram Sons. On that basis, the entire share of profits from those ventures was assessable in the assessees' individual hands, and the argument that only the proportion attributable to Messrs. Valiram Sons should be taxed failed.

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Issues: Whether the assessees' entire shares of profits from the three mill partnerships were liable to be assessed in their individual hands, or whether only the proportion attributable to their shares in Messrs. Valiram Sons was assessable.

Analysis: The decisive question was whether the two assessees joined the three mill partnerships only in their personal capacity or as representing Messrs. Valiram Sons. The evidence, including the books of account of Messrs. Valiram Sons and the consistent treatment of both profits and losses of the three mill partnerships in the common profit and loss account, was found to show by necessary inference that there was an agreement among the partners of Messrs. Valiram Sons that the assessees' interests in those ventures were held for that firm. The absence of a bilateral written agreement and the unilateral character of the declaration were treated as insufficient to outweigh the surrounding conduct and accounting treatment.

Conclusion: The entire share of profits from the three mill partnerships was correctly included in the individual assessments of the assessees, and the contention that only the share referable to Messrs. Valiram Sons was assessable failed.

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