TaxTMI 
TaxTMI 
1960 (3) TMI 5
X X X X Extracts X X X X
X X X X Extracts X X X X
....presented his wife, son and himself. In stating the facts relative to the two families, it will not be necessary to give them separately, because the question which was answered by the High Court in the judgment under appeal arose in identical circumstances in the two families. The only difference is in the shares held respectively by the two Hindu undivided families in the managing agencies to be hereafter mentioned. We will, therefore, confine ourselves to a statement of the facts relating to Charandas Haridas only. Charandas Haridas was the karta of the Hindu undivided family consisting of his wife, three sons and himself. He was a partner in six managing agency firms in six mills. In previous years, the income received by him as partner in these managing agencies was being assessed as the income of the Hindu undivided family. On December 31, 1945, Charandas Haridas acting for his three minor sons and himself and Shantaben his wife, entered into an oral agreement for a partial partition. By that agreement Charandas Haridas gave an one pie share to his daughter, Pratima, in the managing agency commission from two of the six managing agencies held by the family. The balance toge....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed as a finding that the document was not genuine, the method adopted by the family to partition the assets was insufficient to bring about the result intended by it. According to the High Court, the Appellate Tribunal was right in holding that the document was ineffective, and though the income might have been purported to be divided and might, in fact, have been so divided, the source of income still remained united as belonging to the Hindu undivided family. It accordingly answered the question in the affirmative, holding that there were materials before the Tribunal on which it could reach the conclusion that in so far as these income-bearing assets were concerned, they still belonged to the Hindu undivided family. Leave to appeal to this court was refused by the High Court, but Charandas Haridas applied to this court and obtained special leave, and the present appeal was filed. Mr. Viswanatha Sastri, appearing for Charandas Haridas, pointed out that a Hindu undivided family cannot be a partner of a firm. Charandas Haridas, therefore, though he represented the Hindu undivided family, in his capacity as a partner could not insist that the other members of the family be receive....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s received after 31st December, 1945, should be kept joint and in respect of the commission which accrues from January 1, 1946, and received after that date each of us become absolute owner of his one-fifth share and, therefore, from the date, i.e., from January 1, 1946, these commissions cease to be the joint property of our family. But it is our desire that we should keep a memorandum for our memory of the oral partial partition effected on Samvat Year 2002 Magsar Vadi 12, dated December 31, 1945, pursuant to which we have partitioned the commissions to be received by our family. Because of this we keep this note. " The document no doubt mentions "a commission" in respect of each of the six managing agencies, which commission was divided by the document. The word "commission", however, has been used in two different senses; sometimes it refers to the amount of the managing agency commission to be received by Charandas Haridas and sometimes to the right to that commission which Charandas Haridas had as a partner. The sole question is whether the source was effectively divided for purposes of the income-tax law, so that the assessment could not be made upon a Hindu undivided fami....
X X X X Extracts X X X X
X X X X Extracts X X X X
....partnership, the division of the family does not change the position of the partner vis-a-vis the other partner or partners. The income-tax law before the partition takes note, factually, of the position of the karta, and assesses not him qua partner but as representing the Hindu undivided family. In doing so, the Income-tax law looks not to the provisions of the Partnership Act, but to the provisions of Hindu law. When once the family has disrupted, the position under the partnership continues as before, but the position under the Hindu law changes. There is then no Hindu undivided family as a unit of assessment in point of fact, and the income which accrues cannot be said to be of a Hindu undivided family. There is nothing in the Indian income-tax law or the law of partnership which prevents the members of a Hindu joint family from dividing any asset. Such division must, of course, be effective so as to bind the members; but Hindu law does not further require that the property must in every case be partitioned by metes and bounds, if separate enjoyment can otherwise be secured according to the shares of the members. For an asset of this kind, there was no other mode of partition ....