1981 (1) TMI 21

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....r in the status of an AOP ? 2. Whether the Appellate Tribunal was correct in holding that no association of persons was in existence and the assessments framed in the status of an AOP were not valid assessments ? 3. Whether the Appellate Tribunal was correct in holding that no AOP was formed by virtue of the memorandum of partition and the share income derived from the firm did not belong to an AOP ? 4. Whether the notices issued u/s. 148/139 were invalid ? " This reference arises out of assessment proceedings for the assessment years 1972-73 and 1973-74 against the assessee, Indramohan Sharma, and other members of his erstwhile joint family, consisting of himself, his wife and two minor sons, on the footing that they were liabl....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....sessment, the ITO proceeded under s. 147(a) of the Act and issued notice under s. 148 on 11th March, 1977. The ITO rejected the case of the assessee that the erstwhile members of the joint family could not be assessed as an association of persons. These orders for the two years in question were, however, set aside by the AAC, who took the view that no association of persons or body of individuals or a firm came into existence on the partition of the joint family. Following the decision of the Gujarat High Court in Addl. CIT v. Chandulal C. Shah [1977] 107 ITR 91, he held that the assessment as an association of persons could not be sustained and further, relying on the decision of the Tribunal in the appeal out of which Income-tax Reference....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....amily, the nature of the profits received was such that each one of them was severally entitled to his respective share in his own right. Now, it is difficult for us to see how on this finding recorded in respect of the partition deed executed on 21st January, 1971, which is also annexed as annex. 'A' to the statement of the case in this reference, it can even be contended that the members of the erstwhile joint family had joined in a common purpose or had joined in any action or business. If an independent right in favour of each one of the members of the erstwhile joint family is created in respect of a particular stipulated share in the profits of the firm and each one thus has an independent right against the erstwhile karta, merely bec....