TMI Blog1966 (11) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... ment year is 1957-58, the previous year being Diwali Samvat 2013. The assessee was assessed to tax in the status of an individual. The assessee, Mahesh Prasad, and two others, Gopi Nath and Kashinath, were partners with equal shares in the registered firm of Messrs. Vishwanath Prasad Mahesh Prasad at Farrukhabad, hereinafter referred to as the Farrukhabad firm. On 29th January, 1956, the assessee, Mahesh Prasad, joined another firm Messrs. Sidh Gopal Amar Nath, Bareilly (hereinafter referred to as the Bareilly firm), as an employee on a salary of Rs. 200 per mensem. Subsequently, under an instrument of partnership dated December 4, 1955, Mahesh Prasad was made a partner in the Bareilly firm with a share of four annas with effect from 22nd J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the share result of the said Mahesh Prasad party No. 1 in equal shares in their respective Khatas in the firm Vishwanath Prasad Mahesh Prasad. " The assessee, Mahesh Prasad, received the following sums as towards his four annas share from the Bareilly firm in the relevant assessment year : interest Rs. 371, share Rs. 9,113 and salary Rs. 2,600. It was claimed by the assessee before the Income-tax Officer that only 1/3rd of the share received from the Bareilly firm should be assessed in his hands because of the sub-partnership between him and the Farrukhabad firm. The Income-tax Officer rejected the contention and included the entire sum of Rs. 12,084 in the assessment, holding that this was a diversion of income by the assessee after it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded by a decision of the Supreme Court in Fatehchand Murlidhar v. Commissioner of Income-tax, where the decision of the Bombay High Court in Ratilal B. Daftari v. Commissioner of Income-tax was approved and that of the Calcutta High Court in Mahaliram Santhalia v. Commissioner of Income-tax on which the Tribunal placed reliance was overruled. The distinction sought to be drawn by the Tribunal and pressed before us by the learned standing counsel is a distinction without substance. Whether the sub-partnership was contemporaneous or not is not very material. Reading the sub-partnership agreement as a whole and reasonably, it is quite clear that the share of capital invested by the assessee in the Bareilly firm was taken entirely from the Farr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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