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Commissioner of Income-tax Vs. M. Kannappan - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtChennai High Court
Decided On
Case NumberTax Case Petition No. 200 of 1979
Judge
Reported in(1980)17CTR(Mad)311; [1981]132ITR611(Mad)
ActsIncome Tax Act, 1961 - Sections 256(2)
AppellantCommissioner of Income-tax
RespondentM. Kannappan
Appellant AdvocateA.N. Rangaswami and ;Nalini Chidambaram, Advs.
Respondent AdvocateR. Venkataraman and ;Chitra Venkataraman, Advs.
Excerpt:
- .....tribunal's view that the share in the partnership firm can be impressed with the character of the joint family property even though by such declaration the family would have to bear the risk and liability of the partnership business, is sustainable in law ' 2. the assessee, admittedly, made a declaration on april 1, 1968, impressing his share in the firm of m/s. sri krishna corporation with the character of joint family property. before the tribunal, the question that was raised by the department was that the assessee had no right to do so and that, therefore, the income from the firm could not bs deleted from the individual income of the assessee. the tribunal points out in its order that the departmental representative stated that there was no evidence tomake any such plea, namely,.....
Judgment:

1. This is a petition under Section 256(2) of the I.T. Act, 1961, for a direction to the Income-tax Appellate Tribunal to refer the following two questions of law to this court for its opinion :

'1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in deleting the share income of Rs. 11,498 received from the firm of Messrs. Sri Krishna Corporation, Madurai, as not belonging to the assessee ?

2. Whether, the Appellate Tribunal's view that the share in the partnership firm can be impressed with the character of the joint family property even though by such declaration the family would have to bear the risk and liability of the partnership business, is sustainable in law '

2. The assessee, admittedly, made a declaration on April 1, 1968, impressing his share in the firm of M/s. Sri Krishna Corporation with the character of joint family property. Before the Tribunal, the question that was raised by the department was that the assessee had no right to do so and that, therefore, the income from the firm could not bs deleted from the individual income of the assessee. The Tribunal points out in its order that the departmental representative stated that there was no evidence tomake any such plea, namely, that the firm was actually suffering losses. On the other hand, the argument that was addressed before the Tribunal would appear to be that because there was a potentiality for the incurring of losses, the shares in the partnership could not be impressed with the character of joint family property. The learned counsel for the petitioner was not able to draw our attention to any proposition of law in Hindu law or general law to the effect that simply because there was a possibility of incurring losses, a coparcener has no right to impress a property with the character of joint family property.

3. In such a state of affairs, we do not consider that any question of law arises on the facts and circumstances of the case to be referred to this court for its opinion. Hence, the petition is dismissed. There will be no order as to costs.


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