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TMI Blog1953 (10) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... two families ? " The controversy arose at the time of the assessment of the appellant firm to excess profits tax for three chargeable accounting periods, namely, 14th April, 1943, to 13th April, 1944, 14th April, 1944, to 13th April, 1945, and 14th April, 1945, to 31st March, 1946. During the aforesaid chargeable accounting periods the status of the assessee was that of a firm registered under Section 26-A of the Indian Income-tax Act. In the chargeable accounting period ending 13th April, 1944, there was no profit in excess of the standard profit but there was a deficiency of Rs. 12,804. The assessee claimed that the total deficiencies amounting to over Rs. 84,000 carried forward from previous years up to the chargeable accounting period ending 13th April, 1943, should be added to the sum of Rs 12,804 and the aggregate amount should be carried forward under Section 7 of the Excess Profits Tax Act. The Excess Profits Tax Officer rejected this contention on the ground that there had been a change in the persons carrying on the business and the old business should be deemed to have been discontinued and a new business to have commenced within the meaning of Section 8 of the Excess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 934, the sons of Kshetra Mohan Sadhukhan and the sons of Sannyasi Charan Sadhukhan continued the business in partnership. Although this business was carried on in partnership, the members of each branch as between themselves constituted a separate Hindu undivided family right up to the 13th April, 1943, when there was a severance of both the families inter se. The business, however, carried on by the members of the two branches in partnership continued. A deed of partnership is said to have been executed between the eight partners on the 19th September, 1943, and eventually another deed of partnership was executed on the 28th December, 1944. Learned counsel's contention is that the firm was originally a partnership of two Hindu undivided families represented by their respective kartas Kshetra Mohan Sadhukhan and Sannyasi Charan Sadhukhan and that on and from the 17th June, 1934, the sons of Kshetra Mohan Sadhukhan and the sons of Sannyasi Charan Sadhukhan individually became partners in the firm and the firm has remained so constituted at all material times and that there has been no change in the persons carrying on the business within the meaning of Section 8 of the Excess Profit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iance in the case made by his client inasmuch as the partnership which, according to him, was being carried on by and between the individual members of one Hindu undivided family, namely, the four sons of Kshetra Mohan Sadhukhan and the individual members of another Hindu undivided family, namely, the four sons of Sannyasi Charan Sadhukhan may well have been described as a partnership between two Hindu undivided families. A Hindu undivided family is no doubt included in the expression " person " as defined in the Indian Income-tax Act as well as in the Excess Profits Tax Act but it is not a juristic person for all purposes. The affairs of the Hindu undivided family are looked after and managed by its karta. When two kartas of two Hindu undivided families enter into a partnership agreement the partnership is popularly described as one between the two Hindu undivided families but in the eye of the law it is a partnership between the two kartas and the other members of the families do not ipso facto become partners. There is, however, nothing to prevent the individual members of one Hindu undivided family from entering into a partnership with the individual members of another Hindu un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... either of the partners ". These expressions clearly indicate that the partners were two only, and an equal share of eight annas also indicates the same. It further appears that on the 28th December, 1944, another deed of partnership was drawn up. In this deed there are eight parties. Learned counsel for the appellant relies on the first four recitals as clearly indicating that even before the 13th April, 1943, the eight individual members of the two families carried on business in partnership. This construction of those clauses is clearly inconsistent with the fifth recital which says that on and from the 1st Baisak 1350 B. S., i.e., 14th April, 1943, the said firm was reconstituted as constituted of eight partners. If the firm was before 1st Baisak 1350 B.S. constituted of eight partners then there could be no occasion for reciting that " the firm was reconstituted as constituted of eight partners." Further, the statement of case drawn up by the Appellate Tribunal, which is binding on the assessee, clearly indicates that up to 13th April, 1943, the business was a partnership concern carried on by two Dayabhaga Hindu undivided families and that it was after that date that the eight ..... X X X X Extracts X X X X X X X X Extracts X X X X
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