TaxTMI 
TaxTMI 
1991 (2) TMI 174
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....t Hassan and the other at Arsikere. M.R. Puttaswamy died on 12-7-1968 leaving him surviving two sons, M.P. Jayaram and M.P. Basavaraj, and an unmarried daughter, M.P. Padmavathi. After the death of Puttaswamy, his undivided share, which works out to 4/13th, as per the law applicable to the local area, devolved upon his two sons and the unmarried daughter being class I heirs. The remaining 9/13th share continued in the HUF, namely, M.P. Jayaram (major HUF). 3. After the death of Puttaswamy, the cinema business continued as before. The Income-tax Officer was of the view that M.P. Jayaram (major HUF), M.P. Jayaram (ind.), M.P. Basavaraj (ind.) and M.P. Padmavathi (ind.) were jointly carrying on the business of running the theatres and that ....
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.....P. Jayaram, as karta. The argument of Shri Khincha was that, in view of these assessments rightly made, the impugned assessment now made by the Income-tax Officer is not valid in law, and liable to be cancelled. For the revenue, it was argued by Shri Sreedhar that the heirs of Puttaswamy had jointly carried on trade of conducting cinema theatre business along with M.P. Jayaram (major HUF) which held 9/13th share and that the combination of these persons, in the circumstances, could only mean that they had come together to earn income and that AOP is the only status that can rightly be attributed. 8. The authorities cited on behalf of the assessee are : the decision of the Karnataka High Court in the case of G.N. Sunanda v. CIT [1988] 17....
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....heatres should be taken to have been held by the Hindu undivided family and the class I heirs (two sons and a daughter) as tenants-in-common. 10. Returns had been filed by the HUF declaring 9/13th share of income from the cinema theatres and accordingly an assessment has been made. The three individuals declared 1/3rd share out of 4/13th share in their individual returns and accordingly assessments have followed. We have on record a copy of the assessment order made against M.P. Jayaram (Indl.) in respect of his 1/3rd share of the income out of 4/13th share, because the 9/13th, share had been assessed in the assessment made against M.P. Jayaram (major HUF). After completion of the assessments in that fashion, the Income-tax Officer issue....
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....als) has reached. 13. The decision of the Kerala High Court in the case of A.P. Parukutty Mooppilamma is very helpful for the present discussion and we may, with advantage, set out the facts. Certain properties belonged to an HUF. There was a partition and the properties were divided among the shares who were eighteen. Some of the properties were left out of the division, but the deed, however, made it clear that each member of the HUF had 1/18th share. Therefore, after partition, all, the members of the family held the assets as tenants-in-common. One of the erstwhile members of the HUF was authorised to manage the properties. Some trees were sold and the profits were assessable to tax. Before the assessing officer, there was a plea tha....
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....ent of the share income from the three firms in the hands of an association of persons or a body of individuals for the year 1974-75 was not valid." The decision of the Madras High Court in the case of N.P. Saraswathi Ammal is distinguished by their Lordships of the Karnataka High Court in the case of G.N. Sunanda for the late minors had allowed the integrity of the business to continue which, as the High Court points out, was a clear indication of the mother and children keeping in step as a body of individuals. The width of the decision in the case of G.N. Sunanda is good enough to cover a case of the type before us. 15. After the death of Puttaswamy, the HUF had a defined share (9/13th). So the class I heirs of Puttaswamy. The HUF ....
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....such a case would be for the Income-tax Officer to proceed to deal with the other members' shares of income in their respective assessments. Accordingly, when the Income-tax Officer makes an assessment on the share income of the assessee from a joint venture, he exercises his option of assessment which was valid in law and in accordance with law." The High Court of Bombay has taken the same view in the case of V.H. Sheth. In that, the partners or members had been assessed separately on their respective shares in profits and subsequent assessment in the status of firm or AOP was held to be not permissible. Similar is the view taken by the Calcutta High Court in the case of C. Ratan & Co. and S.N. Agarwala and the Patna High Court in the c....