TMI Blog1966 (1) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... ionship between the three parties were not placed, and it was not even argued before the Appellate Assistant Commissioner and the Tribunal that those facts were not placed before the Income-tax Officer. Thus once the option is exercised for assessing the individual partner and including his share of profits in the firm in his assessment, it is not open to the department to assess the same income as income of the unregistered firm. Appeal dismissed. - - - - - Dated:- 7-1-1966 - Judge(s) : K. SUBBA RAO., J. C. SHAH., S. M. SIKRI JUDGMENT The judgment of the court was delivered by SHAH J.--- In the account year ending November 6, 1953, Murlidhar Jhawar, Pannalal Lahoti and Govindbai carried on business in groundnut, cotton an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the status quo ante. " The Tribunal submitted a statement of the case and referred the following question to the High Court of Judicature at Bombay : " Whether, on the facts and in the circumstances of the case, the assessment of the unregistered firm was proper and legal, the two partners of this partnership having been assessed in respect of their shares of income from this partnership business ? " The High Court recorded an answer in the negative. With certificate granted by the High Court, this appeal has been preferred. Under section 3 of the Indian Income-tax Act, income-tax is charged in respect of the total income of the previous year of every individual, Hindu undivided family, company and local authority, and of every ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer, A-Ward, Lucknow v. Bachulal Kapoor that in dealing with a claim made by the Income-tax Officer to assess income in the hands of a Hindu undivided family, after assessing it in the hands of the members on the footing that the family was severed, the " exercise of the option to do one or other of the two alternatives open to an officer assumes knowledge on his part of the existence of two alternatives ". But on the materials before the court we are unable to accept the plea that the Income-tax Officer was not in possession of information relying on which, if he desired, he could have assessed the three parties collectively as an unregistered firm. There is no warrant for the assumption which counsel for the department asks us to make, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es, and even the orders of assessment individually made against the three parties by the Income-tax Officer are not before this court. Only the final order of the Income-tax Officer which directs : " Add : Joint venture income with Messrs. Purna Ginning and Pressing Factory taken provisionally subject to rectification after the assessment of the joint venture, " is incorporated in the order of the Appellate Assistant Commissioner. It is common ground that the assessment made by the Income-tax Officer was not a " provisional assessment " within the meaning of section 23B. It would be reasonable to hold that the income of the three parties was assessed under section 23(3) of the Income-tax Act for the income was earned in commercial transa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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