SHANTIKUMAR MAGANLAL JAIN Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS reference is at the instance of the assessee in which the following three questions have been referred :

(2.) QUESTION No.1 is not pressed, and hence only question Nos. 2 and 3 survive for consideration. The relevant facts giving rise to this reference are as under : There was an HUF of Shantikumar Maganlal Jain consisting of himself, his wife, Vijaybai, and minor sons Uday, Alok and Rajnish. Shantikumar was a partner in the firm of M/s Sonasao Rukhabsao and Company. There was a partial partition of the HUF of Shantikumar Jain, which was reduced to writing on October 22, 1968. It was agreed between the major members of the HUF that the interest of the HUF in the firm of M/s Sonasao Rukhabsao and Company should be partitioned and each of the members of the family would get one fifth share and Shantikumar would continue to be in the firm as partner and profit and loss of every year would be apportioned amongst the members of the family equally in the books of the HUF.

(3.) IT appears that during this year no intimation was given to the firm of M/s Sonasao Rukhabsao and Company about the partial partition, though in the HUF account the partition was recorded. Principally, on the basis of the last clause of the agreement relating to continuation of Shantikumar as partner and the conduct of not giving intimation to the firm about the partial partition, the Tribunal came to the conclusion that the members of the erstwhile HUF of Shantikumar constituted an AOP.