1982 (6) TMI 131

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....ar. The ITO, however, assessed the assessee in the status HUF. The quintessence of the order of the ITO is as follows: In the absence of any partition in the family and order under section 171, the coparceners of the HUF cannot for a separate registered firm and are not entitled to any benefit of registration. This is supported by the decision reported in 77 ITR 870, 29 ITR 521 (SC) in the case of Bhagat Ram Mohanlal. On merits, he rejected the book results of the assessee and applied a gross profit rate of 14 per cent on the total sales estimated at Rs. 1,90,000 as against the gross profit rate of 10 per cent on the sales of Rs. 1,85,746 shown by the assessee. This is how, an addition was made of Rs. 8,025. On appeal, the AAC concurred w....

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....ty of the Privy Council, it clearly appears that a coparcener can become a partner with the Karta carrying on the joint family business, provided he utilises his separate property as capital of the firm. In the instant case, Shri Kailashchand, who is a coparcener, became partner in the firm with Shri Mangilal, Karta without utilising his separate property as capital of the firm. But the argument of Shri Ranka is: he was taken in as a working partner and contribution by working partner of his skill and labour is as good as contribution of the separate property. A copy of the partnership deed is on pages 8 & 9 of the paper book. Clause 8 of the said deed declares that parties shall be honest and they shall be honest to each other and shall at....