TMI Blog1972 (4) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... individual. But in the assessment year 1956-57 he claimed to be assessed in the status of a Hindu undivided family in respect of the income from the above business, but this claim was turned down by the revenue and he was assessed as an individual as in the earlier years. Pukharaj and his son, the assessee, effected a partition of the joint family properties on February 25, 1959. But, the business did not form part of the subject-matter of the said partition. But by a partnership deed dated March 27, 1959, the business was converted into a partnership business between Pukharaj, and Mohanraj with effect from April 1, 1959. On that date Pukharaj transferred a sum of Rs. 61,311 from his capital account to his son's account as representing his son's share capital in the partnership business. The Gift-tax Officer took the view that by converting his individual business into a partnership business and by admitting his son as a partner, Pukharaj had made a gift of not only the said sum of Rs. 61,311 but also the half share in the goodwill of the business. He therefore issued a notice under section 13(2) of the Gift-tax Act (hereinafter referred to as " the Act ") calling upon Pukharaj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in existence at the time when the business in question was started, that this Hindu undivided family did possess certain properties which were subsequently partitioned under a partition deed, dated February 25, 1959, that the income from the properties partitioned on February 25, 1959, would have been sufficient for starting the business 30 years ago, that his son, Mohanraj, was also actively associated with the business in question for a long time, and that the proximity of time between the partition of the joint family properties and the constitution of the partnership indicated that the constitution of the partnership was part and parcel of the partition arrangement of the joint family properties. From these facts, it proceeded to draw a presumption that the business in question was in fact started by Pukharaj from and out of the joint family nucleus and that the business would therefore partake the character of a joint family property and that the only evidence by which the revenue seeks to rebut this presumption that the income from the business had all along been assessed in the hands of Pukharaj in his individual capacity was not sufficient, especially as Pukharaj himself di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 363 : " The burden of proving that any particular property is joint family property, is in the first instance upon the person who claims it as coparcenary property. Where the possession of a nucleus of joint family property is either admitted or proved, an acquisition made by a member of the family is presumed to be joint family property. But, this is subject to the limitation that the joint family property must be such as with its aid the property in question could have been acquired. And, it is only after the possession of an adequate nucleus is shown, the onus shifts on to the person who claims the property as self-acquisition affirmatively to make out that the property was acquired without any aid from the family estate. " At page 363 : " Whether, in the case of a joint family possessed of some joint property, there is or is not a presumption that any property in the hands of an individual member is not his separate individual property, but joint property, no such presumption can be applied to a business. Unless the business of a coparcener grew up from joint family property, or that the earnings were blended with joint family estate, they remain free and separate. The q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal to support its finding that there was sufficient nucleus and that the business in question was a joint family business. It is true that the initial onus to establish that there was sufficient nucleus in the joint family with which the business could have been started by the father lies on the son who claims a share in the business. But, once the sufficiency of the nucleus is established, the onus shifts to the person who claims that the business was exclusively owned by a coparcener. Whether the evidence adduced by the assessee was sufficient to shift the burden which initially rested on him of establishing that there was sufficient nucleus out of which the business could have been started by his father, Pukharaj, is one of fact depending on the nature and the extent of the nucleus. This is clear from the decision in Srinivas Krishnarao Kango v. Narayan Devji Kango. Therefore the important thing to consider here is the income which the joint family nucleus could have yielded. Admittedly, Pukharaj, the assessee's father, came to Coimbatore 30 years ago and started the business. The properties divided under the partition deed dated February 25, 1959, between the assessee and h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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