1934 (11) TMI 16

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....istered firm (consisting of the two joint families as partners) became a partner in nine other unregistered firms. On a reference made by the Income Tax Commissioner on a previous occasion it has been held by a Bench of this Court that the registered firm (consisting of the two joint families) could not in law be a partner in the aforesaid nine unregistered firms. The result of this decision was that each of the two joint families was taken to be severally a partner in the nine unregistered firms and not as a component part of the registered firm. A sum of Rs. 1,81,338 was received by the registered firm as its share of the profits from some of the unregistered firms of which it had become a partner. The share of each of the two joint fa....

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....t being a registered firm, an additional duty of Income Tax (in this Act referred to as super-tax) at the rate or rates laid down for that year by Act of the Indian Legislature : Provided that, where the profits and gains of an unregistered firm have been assessed to super-tax, super-tax shall not be payable by an individual having a share in the firm in respect of the amount of such profits and gains which is proportionate to his share." The learned advocate for the department has strenuously contended that the word "individual" accruing in the Proviso must be assigned the same meaning as it bears in the main section. He points out that the word "individual" has been used in the section as not including a Hindu undivided family....

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....n two parts of the same section differently. Section 55 lays down generally that every individual, joint Hindu family, company, unregistered firm (a registered firm is separately provided for) or other association of individuals is liable to pay super-tax in addition to the income tax payable under the Act. As the section makes, inter alia, an unregistered firm liable to super-tax, the Proviso is intended to make it clear that the component parts of such unregistered firm cannot be made to pay super-tax if the firm itself has already paid it. If the contention put forward on behalf of the department be accepted the result will be somewhat anomalous in a case in which an unregistered firm consists of partners one of whom is a Hindu undivided....