9911796707
TMI Blog1981 (1) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... the Appellate Tribunal was correct in holding that no association of persons was in existence and the assessments framed in the status of an AOP were not valid assessments ? 3. Whether the Appellate Tribunal was correct in holding that no AOP was formed by virtue of the memorandum of partition and the share income derived from the firm did not belong to an AOP ? 4. Whether the notices issued u/s. 148/139 were invalid ? " This reference arises out of assessment proceedings for the assessment years 1972-73 and 1973-74 against the assessee, Indramohan Sharma, and other members of his erstwhile joint family, consisting of himself, his wife and two minor sons, on the footing that they were liable to be assessed as an association of persons. W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act and issued notice under s. 148 on 11th March, 1977. The ITO rejected the case of the assessee that the erstwhile members of the joint family could not be assessed as an association of persons. These orders for the two years in question were, however, set aside by the AAC, who took the view that no association of persons or body of individuals or a firm came into existence on the partition of the joint family. Following the decision of the Gujarat High Court in Addl. CIT v. Chandulal C. Shah [1977] 107 ITR 91, he held that the assessment as an association of persons could not be sustained and further, relying on the decision of the Tribunal in the appeal out of which Income-tax Reference No. 412 of 1978 (CIT v. Indramohan Sharma (No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat each one of them was severally entitled to his respective share in his own right. Now, it is difficult for us to see how on this finding recorded in respect of the partition deed executed on 21st January, 1971, which is also annexed as annex. 'A' to the statement of the case in this reference, it can even be contended that the members of the erstwhile joint family had joined in a common purpose or had joined in any action or business. If an independent right in favour of each one of the members of the erstwhile joint family is created in respect of a particular stipulated share in the profits of the firm and each one thus has an independent right against the erstwhile karta, merely because the karta received the entire profits in a lump ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pose, it would be difficult to hold that they formed themselves into an association of persons as contemplated by the I.T. Act. The right to receive the stipulated share of profits from the partnership firm, where the erstwhile karta continued to be a partner, did not flow from any agreement between the parties to carry on any common venture, but that right flowed from the right of a separated member of a Hindu joint family as a result of partition. It is, therefore, difficult to accept the contention raised on behalf of the Revenue that the different members of the family of the assessee, after partition, could be assessed as an association of persons. The finding recorded by the AAC and the Tribunal that the action of the, ITO in proceedi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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