MATHURA PRASAD Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) A Hindu undivided family consisting of five brothers - Jagan Prasad, Har Prasad, Mathura Prasad, Sheo Prasad, Basdeo Prasad and their nephew, Dilsukh Rai (son of Badri Prasad, deceased), owned considerable property and carried on different businesses in the names of Messrs. Agarwal Iron Works, Agra, Messrs. Jagan Prasad Sheo Prasad, Messers. Jagan Prasad Har Prasad and Messrs. Nek Ram Jagan Prasad. On October 11, 1948, a partition of the properties and the businesses of the family was made among the six branches and as a result of that partition a sixth share was allotted in the assets partitioned to the smaller Hindu undivided family of which Mathura Prasad was the manager.

(2.) After partition of the joint family estate, the managers of the six branches entered into an agreement of partnership to carry on in the name of Badri Prasad Jagan Prasad the businesses which were formerly conducted on behalf of the larger Hindu undivided family. By clause 8 of the partnership agreement, it was provided :

(3.) For the assessment year 1950-51 the Hindu undivided family of Mathura Prasad field a return for the previous year Samvat 2006. Mathura Prasad filed another return in the status of an individual for the same previous year and in that year he disclosed an income of Rs. 21,000 "received as remuneration form the firm of Messrs. Badri Prasad Jagan Prasad". The Income-tax Officer, F-Ward, Agra, held that the income disclosed by Mathura Prasad as an individual was liable to be taxed in the hands of the Hindu undivided family and directed inclusion of that amount in the assessment of the Hindu undivided family of Mathura Prasad. The order passed by the Income-tax Officer was confirmed in appeal by the Appellate Assistant Commissioner and by the Income-tax Appellate Tribunal.