MADHAV MOTOR STORES Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a reference made by the Income -tax Appellate Tribunal under s. 66(2) of the I.T. Act, 1922, at the instance of the High Court. The following question has been referred to us :

(2.) A few facts may be stated : We are concerned with the reference for the assessment year 1946 -47 and the corresponding previous year is the year 1945. The assesses is a HUF doing business in petrol and textiles. One Shrikrishna Bijnath, who died in 1933, left behind him three sons, Madhavprasad, Jagmohan and Kunjbehari. Shrikrishna started a business in petrol under the name of Madhav Motor Stores. The income from this business was assessed in the status of HUF. Another business called Ruia Textiles Company was started after his death in or about 1939. Similarly, two other businesses in the names of textile agents and chemical agents were also started in 1941 and 1942, respectively. On December 15, 1941, the three brothers entered into an agreement in which it is stated that they had effected a severance amongst themselves from January 1, 1940. The agreement was apparently to keep the record of the partition to avoid future dispute. In the document it was, inter alia, mentioned that the first two businesses could not be divided and were accordingly held by them as tenants in common in equal shares. On the very day, a partnership deed covering the two businesses was entered into. From 1942 -43 onwards, it was claimed that income from these businesses should be assessed on the fiem. This claim was, however, not accepted. Similar claims were made by them for the subsequent years including the year with which we are concerned and met with the same fate. All the assessments were done on the basis of income earned by the HUF. The appeals against the determination of status for these years were not successful.

(3.) SUBSEQUENTLY , by a letter dated October 13, 1961, the assessee raised a ground about alleged absence of service of notice on the assessee for the assessment year in question.