COMMISSIONER OF INCOME TAX Vs. SIVAPRAKASA MUDALIAR S

JUDGEMENT

(1.) THIS is case stated by the Income-tax Appellate Tribunal. It at once raises a point of partnership law and a point of Hindu law.

(2.) THE assessee who fingers in this reference is an individual, being assessed as such on his separate income. He is the karta of an HUF, the other members being his wife, two sons and three daughters. THE assessee was a partners in two partnership firms called "Cuddalore Palayacot Company" and, "Kasthuri Palayacot Company ". He has a 3/28ths share in one firm, and a 3/17ths share in the other firm., On October 20, 1969, he executed a deed of declaration under which he impressed one-half of his partnership interest with the character of joint family property. He further declared that he would there forward hold one-half of his interest in the two firms only in his capacity as karta of his joint family. He then claimed before the ITO that the shares of profits from the two firms, namely, 3/28ths and 3/17ths must be taken to consist of two halves, one half alone to be included in his personal assessment, the other half to be considered in the hands of the joint family.

(3.) THIS question, as we earlier indicated, involves a consideration of two distinct matters, one touching the partnership law and the other touching Hindu law.