COMMISSIONER OF INCOME TAX Vs. GOSTHA BEHARI SADHUKHAN

JUDGEMENT

(1.) : This is a reference by the Tribunal at the instance of the CIT, Calcutta. The facts concerned can shortly be stated as follows :For many years a business known as Gopal Pure Oil Mills was owned by a HUF the members of which were Gostha Behari Sadhukhan and his three nephews, Sarat Chandra Sadhukhan, Rabindra Nath Sadhukhan and Panchkari Sadhukhan. Up to and including the year of assessment 1941-42, this business was assessed as an HUF. On the 29th Oct., 1942, an application was made to the ITO under s. 26-A(1) of the IT Act to register a deed of partnership. The ITO refused to register it. The deed of partnerships is dt. 15th June, 1942, made between Gostha Behari of the first part, Sarat purporting and stating as representative of himself and his brothers Rabindra and Panchkari of the second part, and three other persons, Amulya Charan Samanta, Jugal Krishna Das and Kartick Chandra Pramanick, who were, and had been for many years employees of the business. The deed recites that the parties, which clearly means Gostha Behari and Sarat, had been carrying on the business jointly till the end of the year 1345 B. S. corresponding to the 13th April, 1939, and for better management of the business the parties agreed to carry on the business as partners. The shares in the partnership are divided as to Gostha 5 as. 6 ps., Sarat 5 as 6 ps., Amulya 2 as. 9 ps., Jugal 1 a. 3 ps., and Kartick 1. The ITO was not satisfied that previous to the execution of the partnership deed the business had been the subject of partition amongst the members of the family above mentioned and he refused to register the deed of partition and assessed the profits of the business on the basis of an HUF.

(2.) AN appeal by the assessee was dismissed by the AAC on the 23rd June, 1943, but a further appeal was allowed by the Appellate Tribunal by their order dated the 11th Dec., 1943. The CIT being dissatisfied with this order obtained a reference under s. 66 of the Act from the Tribunal for the following question to be answered by this Court : "Whether the relationship between the five persons as evidenced by the deed dt. 15th June, 1942, is one of partnership under the Partnership Act, 1932," or, in the alternative, "Is there any legal impediments to the recognition of the partnership."

(3.) IN the case of Jattu Shah Nathu Shah vs. CIT, Punjab and N. W. F. Provinces (1932) 6 ITC 162 : 14 Lah 134, two deeds were placed before the ITO, in one of which there was a statement that the joint family had already been disrupted, and in the other that the family had been divided since a long time. That was a case in which a decision under the provisions of s. 25-A of the Act was given and it was held that those bare statements in the two deeds were insufficient to establish a separation or partition of the property.