Harilal Kania, A C J - (1.)This is a reference made under Section 66(1) of the Indian Income-tax Act, 1922, by the Income-tax Appellate Tribunal.
(2.)The relevant facts as found in the statement of case are these: The year of assessment is 1942-43 and the income of the previous year, which is sought to be taxed, is the Hindu year commencing from October 31, 1940, and ending on October 20, 1941. The assessee was sought to be assessed as the karta of a joint Hindu family. He had been so assessed in the previous years. In July, 1941, the members decided to separate and make a partition of the family properties and assets. For that purpose they divided themselves into four groups. The first group consisted of the aseessee, his wife and three minor sons together. The remaining three groups consisted of the three major sons and their own families. They started making a division of the family cash, jewellery and the businesses and completed it on July 30, 1941. That division was embodied in a memorandum which the parties executed that day. The document expressly stated, and the fact was also admitted before the Tribunal, that the shares of the different groups in the moveables and businesses did not correspond exactly with the interest which they possessed in the family estate according to Hindu law, It appears that there was some disagreement amongst the members as regards the division of the immoveable properties and consequently there was a reference to arbitration so that the final adjustment of the shares should be made by the arbitrators, at the time of the division. On July 31, 1941, the parties submitted a reference to arbitration and the award was made on October 16, 1941. Thereafter a decree on the award was passed on February 3, 1942.
(3.)In paragraph 7 of the statement of case it is stated as follows; After the division of the business on July 30, 1941, the applicant and his three major sons separately carried on those that were assigned to their respective shares till the end of the year of account, i.e. October 20, 1941.