1971 (12) TMI 41

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....f Venkataratnam, i.e., a sum of Rs. 8,078, and for the assessment year 1966-67, a sum of Rs. 8,502 were credited to the joint family account and deducted from the income of the firm for each of the years. The Income-tax Officer, holding that in the previous years the interest was being added to the income of the firm as interest paid to a partner, and as there was no change in the position for the two assessment years, added back the interest payments to the income returned as interest paid to the partner. On appeal, the Appellate Assistant Commissioner held that for the years in question the capital account in the books of the firm has been re-designated as the family account and another account was opened in the name of the partner, K. Ve....

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....rs, some of whom may not have attained the age of majority and some may at a given time be unborn, the joint family as a unit is incapable of entering into a partnership agreement contemplating the creation of mutual rights of agency among its members. Therefore, it is only one of the members of the joint family, either the karta or any one of them, who can by agreement become a partner of the firm and by the partnership agreement, no other members of the family acquires a right or interest in the partnership. The other members of the family may make a claim against the karta or other coparcener who has become a partner for treating the income or profits received from the partnership as a joint family asset, but they cannot claim to exercis....