CHIEF COMMISSIONER OF INCOME-TAX, MADRAS, REFERRING OFFICER Vs. DORAISWAMI AYYANGAR AND BROTHERS, ASSRSSEES

JUDGEMENT

(1.) This is a case stated by the Chief Commissioner of Income-tax to the High Court under Section 51 of the Income-tax Act (VII of 1918) read with Section 6 of the Super-tax Act, 1920. The question for decision is. whether the assessees who are the registered firm of M. Doraiswami Ayyangar and Brothers are assessable to super-tax as an undivided Hindu family and the specific questions put to us are as follows: (1) Does the registration of the brothers as a firm as defined under Section 2 (12) of Act VII of 1918 preclude the assessment of the family as an undivided family to super-tax on the income derived from the business of this firm? (2) If not, does the mere constitution of a partnership between some members of the family by a formal document preclude the assessment of the income of the partnership to super-tax as part of the income of the undivided family?

(2.) When this case first came before us we thought it necessary to have more information than was afforded to us by the original case stated and therefore referred the case back for a finding of fact as to whether the original capital of the firm was wholly or in part derived from joint family funds The answer to that is to be found in the Commissioner's letter, dated the 5 of August 1922, the concluding paragraph of which runs as follows: On the whole no adequate evidence has been adduced which would enable one to record a finding as a fact whether the original capital of the firm was wholly or in part derived from joint family funds.

(3.) To that is appended the following statement: It can only be inferred from the conduct of the assessees and all the circumstances of the case that appellants intended to trade as a joint family and did trade as such.