HANUTRAM BHURAMAL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is the statement of a case by the Commissioner of Income-tax in the matter of an assessment made upon a joint family in respect of a business carried on by them. The material facts may be very shortly stated. The family are the descendants of one Chaturbhauj who left two sons. The eldest son left three sons the eldest of whom was one Nemchand. From the younger son was descended one Bhuramal who had, in turn, two sons Sohan Lal and Puranchand. During the year of assessment Nemchand dropped out of the family business and became separate from the other members and ceased to have anything to do with the business. The remaining members continued to carry on the family business. A great deal of discussion has taken place before us as to whether the business terminated or not. The phrase discontinuance of business is apt to be used in an ambiguous sense. Business may change hands; a partner may cease to be a partner, the business being carried on by his co-partners; but such events do not constitute a discontinuance of the business in the sense meant in Section 25 of the Income-tax Act. Such events are merely a change in the ownership of the business. The finding of fact concerning which there can be no dispute was that on the disconcerning which there can be no dispute, was that on the disappearance of Nemchand the business continued in the hands of the other members of the family.

(2.) NOW, the first question of the Commissioner which we have to answer is whether in the circumstances of this case that assessment was rightly made on the basis of a Hindu undivided family. This question in part depends upon whether the business was the same business after as before the elimination of Nemchand or whether it was a different business, and that is a question of fact which was decided by the Assistant Commissioner and it is submitted by the commissioner to have been so decided as a question of fact and the Commissioner rightly contends that it is merely a question of fact. But even in the circumstances the matter is not open now, whether it be a question of fact or a question or law, because the point was not raised before the Assistant Commissioner. The proper answer, in my opinion to the direct question whether in the circumstances of this case the assessment was rightly made on the basis of a Hindu undivided family should be in the affirmative. As a matter of fact, under proper construction of the Act the present members of the family are really liable for the whole of the year under assessment in respect of the tax payable for that year; but the department has charged them, very reasonable only with the tax for the period after disappearance of Nemchand. With this question however, we are not concerned.