LexTOLARAM BIJOY KUMAR versus COMMISSIONER OF INCOME TAX, ASSAM
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834
TOLARAM BIJOY KUMAR
v.
COMMISSIONER OF INCOME TAX, ASSAM
February 14, 1978
B
[M. H. BEG, C. J., P. N. BHAGWATJ & V. D. TULZAPURKAR, JJ.]
c
D
E
F
G
H
Hindu Undivided Family business, Partition of-
Nawre & character of the
share of tlie property of a coparce11er after, parti1io11-Wlre1her assessab{e as
individual properly or as H.U.F.-lncome Tax Act. 1922.
The income from the business of Nathmal Tolaram carried on by Narmal
was assessed as Hindu Undivided Family im:ome till 1950.
After the death of
Narmal in 1945, the business was partitioned w.d . 6th April 1949 and by a
deed of partnership executed on 7th April 1949, the business carried on at two
places, Dhubri and Gauripore, was converted by his three sons Srinivas, Nathmal
& Tolaram, into a partnership business.
Jn this deed, it was admitted that th«i
business had been carried on previous to the partition as Hindu Undivided
Family business.
On an application u/ s 25A of the Income Tax Act, 1922 the
said partition was .recorded and registered in the files of the tax authority on
17th August 1954. On 28-3-1959, the firm of. M /s. Nathmal Tolaram was dis-
solved and a new firm Nathmal Tolaram (Petrol Depot) came into existence.
Jn the assessment year 1959-60, Tolaram claimed that his share in this partner-
ship business should be assessed separately as his individual income. His claim
was rejected by the Income Tax Officer, but wa~ accepted in appeal. However
a similar claim for the relevant assessment year 1960-61, to separate assessment
of income derived from . the partnership business in petrol amounting to Rs.
21,746 /-, ,-,·as rejected by the Income Tax Officer.
On further appeals, the
Appellate Assistant Commissioner and the Tribunal affirmed the order of the
Income Tax Officer. The High Court also answered the reference in favour of
Revenue.
HELD : Partition only cuts off the claim of the dividing coparceners. When
a coparcener receives his share· of the joint family property on a partition, such
property in the hands of the coparcener belongs to the Hindu Undivided family
as the share of the property is taken by him only as representing his branch.
The statt1s of such coparcener on partition is not that uf an individual. [837 A-DJ
Jn the instant case, the share of Tolaram in the partne r~h iµ which c:•me into
bei•.1g on the partition Qf the Hindu Undivided Family could not be regarded as
his separate property. Jt became the property of the Joint Hindu Family of
Tolararn and his sons since the business prior to the partition of the Hindu
Undivided family was assessed as joint family business and the partition deed
sig'rled by Tolaram and others itself contained a recital '.o that effect. [838 B-CI
N. V. Rnre11dranath v. Commi.uioner of WM/th Tax, Andhra Pradc'l11, 74
I. T. R. 190; followed.
Chiranji/al v. Commissioner of Income Tax, (1965) 56 J.T.R. p. 715 @
722 referred to.
CIVIL APPELLATE J URISDICTION : Civil Appeal No. 1980 of 1972.
Appeal by Special Leave from the Judgment and
Order dated
26-5-1 972 of the Assam & Nagaland High Court in I.T.R. No. 6 of
1968.
B. B. Ahuja and S. K. Nandy, for the Appellant.
T. A. Ramachandran and R. N. Sachthey, for the Respondent.
.>--
I
TOLARAM v. C.I.T. (Beg, C.J.)
835
The Judgment of the Court was delivered by
BEG, C.J.-The appellant, a Hinda Undivided Family, is before us
by special leave through its Karla Tolaram. The statement of the case
shows that Narmal, who
died in the year
1945, left three sons :
Srinivas, Nathmal and Tolaram.
Narmal had carried on an Hindn
undivided family business started roundabout 1925. It appears that
A
the name of the business was changed to Nathmal Tolaram from 1936-
B
37 and that the income of the business was assessed as Hindu Un-
divided Family income since then. The previous records do not seem
to be very clear, but, from the year 1942 to 1950, the income of this
business was certainly assessed as Hindu
Undivided Family income.
It was partitioned with effect from 6th April, 1949. After the parti-
tion, the business carried on at two places, Dhubri and Gauripore, was
converted into a partnership business evidenced by a deed of partner- c
ship executed by the three brothers on 7th April, 1949. In this deed,
it was admitted that the business had been carried on previous to the
partition a·s Hindu Undivided Family business.
On 19th September, J 950, an application was made under section
25A of the IncoExcerpt shown. Read the full judgment & AI analysis in Lexace.