COMMISSIONER OF INCOME TAX Vs. P M MUTHURAMAKRISHNAN

JUDGEMENT

(1.) THE assessee in this case was a partner in a firm M/s. Metro Handlooms ". By a declaration dated March 12, 1973, the assessee threw his individual interest in the partnership in the family hotchpot of the Hindu undivided family consisting of his father, himself and his brothers. In respect of the assessment year 1973-74, the Incometax Officer negatived the assessee's claim that he has thrown his interest in the partnership into the hotchpot of the family and impressed the same with the character of joint family property and, therefore, his share of income from the partnership has to be assessed in the hands of the family and assessed the entire share income from the partnership in his individual assessment.Aggrieved against the said assessment, the assessee filed an appeal to the Appellate Assistant Commissioner, who held that the assessee was at full liberty to throw his interest in the firm into the common hotchpot and impress it with the character of joint family property and that the assessee having done so by a declaration dated March 12, 1973, the income attributable to his share in the partnership should have been considered as the income of the Hindu undivided family subject to the provisions of section 64 of the Partnership Act. Against the order of the Appellate Assistant Commissioner, the Revenue appealed to the Income-tax Appellate Tribunal.

(2.) THE Tribunal also sustained the view taken by the Appellate Assistant Commissioner and held that after the assessee's declaration dated March 12, 1973, the income attributable to the assessee's share in the partnership should be taken to be the income of the joint family and assessed as such and that it cannot be taken to be exclusively the individual income of the assessee. Aggrieved by the decision of the Tribunal, the Revenue sought and obtained a reference to this court on the following question of law" *Whether, on the facts and in the circumstances of the case, the assessee could be said to have legally thrown his interest in the firm of Metro Handlooms into the joint family hotchpot ? "It is well established that if a coparcener having separate property, voluntarily throws it into the joint stock with the intention of abandoning all separate claims upon it, then it becomes joint family property with all its usual incidents. As has been observed in CIT v. Kishan Lal. It is settled law that a coparcener, who is a member of a Hindu undivided family, has a right to throw his self-acquired property in the common hotchpot.