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TMI Blog1987 (10) TMI 83X X X X Extracts X X X X X X X X Extracts X X X X ..... Desai out of natural love and affection and it was given in the form of a cheque dated 23-4-1975 drawn on India Bank, Matunga Branch, Bombay. thereafter, Bharat B. Shah joined as partner in a partnership firm of M/s. Chhaganal Keshavji with effect from 1-5-1975. a copy of the partnership deed has been filed before us and clause 6 of the said deed indicates that Bharat B. Shah was admitted as a partner with 25 per cent share in his capacity as karta of the HUF of Bharat B. Shah. He had 33-1/3rd per cent share in the losses. The share of profits receivable from this firm for the period 1-5-1975 to 30-9-1975 was shown as income of the HUF in the assessment year 1976-77. the Income-tax Officer, while completing the first assessment, rejected the claim of the assessee that he was a partner in the status of HUF on the ground that the assessee had children and the capital invested by the assessee of Rs. 6,000 was received by him by way of gift and there was no detriment to the ancestral property at all but completed the assessment only on a protective basis. He also made the assessment on Bharat B. Shah in his individual capacity. The matter went in appeal and the AAC, who first decided t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of profits from the firm of Chhaganlal Keshavji belonged to Bharat B. Shah in his capacity as karta of the family and not in his individual capacity. 3. In the course of hearing before us, both the parties reiterated the arguments that were advanced earlier. Before we deal with the issue raised before us, certain further facts which emerged in the course of appeal hearing as a result of queries from the Bench require to be stated. The firm of M/s. Chhaganlal Keshavji apparently came into existence on 18-2-1958 and initially consisted of two partners, Sunita Bhogilal Shah and Manubhai Amrutlal Desai. Hemendra Bhogilal Shah and Bharat B. Shah were minors and admitted to the benefits of partnership. On 28-11-1960, Hemendra attained majority and there was consequential change in the constitution when he elected to become a partner on that date and this facts was recorded in that deed on 27-12-1960. Similarly, Bharat, on attaining majority on 30-7-1965, elected to become partner with effect from 30-9-1965. The same Bharat apparently retired on 30-4-1975 in his individual capacity and was admitted as a partner in his capacity as karta of the HUF of Bharat B. Shah and his wife Neena Bha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x in the status of HUF. On these facts, the Supreme Court held firstly that the appellant, his wife and unmarried daughter were members of HUF; that, however, since until the birth of a son the personal law of the appellant regarded the appellant as the owner of Kathake Lodge and the income therefrom as his income even after the property was thrown into the family hotchpot, the Income was chargeable to income-tax in the appellant's hands as his individual income and not that of the family. The facts in the present case differ from those in the case before the Supreme Court on the limited point, namely, that Bharat B. Shah received Rs. 6,000 as a gift from Manubhai A. Desai. This gift was described as gift to the Huf and the amount so gifted was introduced by him as capital for being admitted as partner and therefore generated the income in the form of share of profits from the firm. As in the case before the Supreme Court, there was no nucleus of ancestral funds which were invested by Bharat B. Shah when he allegedly became a partner in his capacity as karta of the HUF. Till the day before he was so admitted, i.e., till 30-4-1975, he was partner in his individual capacity. The tota ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er did not make ancestral property joint. The crucial facts in Kalyanji Vithaldas's case on which the ultimate decision rested are these : (i) In regard to three partners, Moolji, Purshottom and Kalyanji though each of them was the head of his joint family which included in every case a son or sons, the income which each received from the firm was his separate and self-acquired property which was not thrown into the common stock. (ii) In regard to Chaturbhuj, though he had no son, that fact was irrelevant because his interest in the firm was his self-acquired or separate property in which the son could have taken no interest by birth. (iii) And in regard to Kanji and Sewdas, even if their interest in the firm was assumed to be ancestral property, the income which they received from the firm was their separate property as neither of them had a son who could take interest in the ancestral property by birth." The case of the appellant before us is similar to that of Kanji and Sewdas in Kalyanji Vithaldas's case. We can do no better than quote from the Privy Council decision the following observations: "There remain the cases of Kanji and Sewdas. Neither has a son but, in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X
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