1993 (2) TMI 10

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....e in the hands of the assessee family ? " The question was answered in the affirmative, i.e., in favour of the Revenue and against the assessee by the High Court. Two brothers, Parmanand and Sadanand, constituted a partnership some time prior to 1947. Sadanand died on June 28, 1947. On his death, his widow, Smt. Raj Kumari, was inducted as a partner in place of her husband. This new partnership was evidenced by a deed of partnership, dated November 6, 1947. Sadanand had left behind two sons, Brij Mohan and Man Mohan, who were minors on the date of his death. On June 28, 1948, the firm was reconstituted by admitting a working partner, Ram Lubhaya. He was given two annas shares and the remaining fourteen annas shares was equally divided....

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....Rs. 250 per month, respectively. On April 1, 1965, the allowances payable to Brij Mohan and Man Mohan were raised from Rs. 400 and Rs. 250 per month to Rs. 1,400 and Rs. 1,200 per month, respectively. Till the assessment year 1966-67, Brij Mohan was filing his return of income as an individual disclosing therein both the share income from the partnership and the allowance received by him from the partnership. A son was born to him on November 14, 1966. Evidently, he thought that the birth of a son gives rise to a Hindu undivided family. Be that as it may, for the assessment years 1967-68 and 1968-69, he filed returns in the status of Hindu undivided family disclosing therein both the partnership share income and the allowance received....

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....of the Hindu undivided family. It was this finding of the Tribunal that the assessee questioned by way of a reference. The question referred, it may be mentioned, calls into question the correctness of the conclusion arrived at by the Tribunal, The High Court answered the reference against the assessee mainly on the basis that, on the facts found by the Tribunal, there was no justification for the increase in the allowance/salary of Brij Mohan. The sudden jump, it observed, was not warranted by the requirements of business. The correctness of the view taken by the High Court is questioned in this appeal. Two broad facts need be noticed in this case. The assessed income of the partnership has gone up from Rs. 68,622 for the assessment yea....