9911796707
TMI Blog1972 (1) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... brought in a sum of Rs. 5,000 to the business and became an eight anna partner in it. For the assessment year 1961-62, the Partnership firm applied for registration under the Indian Income-tax Act and thereafter declarations were filed for the assessment years 1962-63 and 1963-64 in accordance with section 184(7) of the Act. The Income-tax Officer declined to register the firm for these three years, holding that it had not been proved that Narendra Kumar had brought in the capital alleged, and, further, that an undivided junior member could not become a partner with the karta of the family. He included the income in the hands of the Hindu undivided family. The firm as well as the family appealed to the Appellate Assistant Commissioner, an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly ? " It seems to us fairly plain that the view taken by the Tribunal is right in law. Motilal, the karta of the Hindu undivided family, entered into partnership with Narendra Kumar, an undivided member of the family, who brought into the partnership his separate property. When Narendra Kumar entered into partnership with Motilal, karta of the family, he brought into the partnership a sum of money as his capital, and admittedly that money represented his separate property. Narendra Kumar was entitled to enjoy the benefit of that separate property. He could invest it as capital in a partnership entered into with a stranger. He could do so also in a partnership entered into with the karta of his Hindu undivided family. In the latter event, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngers, the individual members of the family could not be said to have become partners also. After referring to Lachhman Das, the Supreme Court observed: " But in the present case, the basis of the partnership agreement of 1940 is that the family was joint and that Mohanlal was its karta and that he entered into partnership as karta on behalf of the joint family. It is difficult to reconcile this position with that of Chhotelal and Bansilal being also partners in the firm in their individual capacity, which can only be in respect of their separate or divided property. If members of a coparcenary are to be regarded as having become partners in a firm with strangers, they would also become under the partnership law partners inter se, and it w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y all or any of them acting for all : if such a relation exists, it will not be invalid merely because two or more of the persons who have so agreed are members of a Hindu undivided family." It will be noticed that both the karta as well as the individual coparcener represented the interest of the Hindu undivided family. It was not a case where the coparcener was present in his individual capacity. Reliance has also been placed on Manilal Dharamchand v. Commissioner of Income-tax. Here, two of the members of the partnership firm had joined it in their individual capacity and the other members were the kartas of the Hindu undivided families of which those individuals were also members. It was found as a fact, which seems to us to be a sign ..... X X X X Extracts X X X X X X X X Extracts X X X X
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