SATISH CHANDRA, J. - (1.) REFERENCE No. 655 of 1973 relates to the asst. yr. 1961-62 while 84 of 1975 relates to 1962-63 for the same assessee.
(2.) ON 2nd Aug., 1957, there was a partition in a HUF, Hotilal Jagannath. Asharfi Lal, s/o Munnalal (who was one of the members of that H.U.F) received a sum of Rs. 4,000/- in cash and one residential house at this partition. At that time, Ashafi lal was carrying on individual business under the name Asharfi Lal Radhey Shyam. He invested the amount of Rs. 4,000/- in this business. At that time his own HUF consisted of himself, his wife, one major and one minor son and his mother. On 3rd July, 1959, an agreement was executed between the members of this family under which the amount of Rs. 4,000/- was divided equally between him, his mother and his two sons. Since amount had been invested in the business. Asharfilal agreed to pay Rs. 1,000/- in cash to his mother and his two sons each. The agreement went on to provide that Asharfilal will close down his personal business and the same would be run in partnership with his mother and his major son. His minor son Krishna Kumar was to be admitted to the benefits of this partnership. His mother and his two sons were to invest Rs. 2,000/- each in this partnership business. Asharfilal was to sell the stock of cloth to the partnership and the price of the same was to be credited in his account in the partnership business. In accordance with this written agreement, a partnership deed was drawn up and executed on 11th July, 1959. This shares were Asharfilal 5 annas, Smt. Bhagwadidevi 4 annas, Radhey Shyam 5 annas and Krishna Kumar 2 annas while in the event of loss, the shares of the three major partners were Asharfilal 5 annas 9 pies, Smt. Bhagwati Devi 4 annas 6 pies and Radhey Shyam 5 annas 9 pies.
(3.) FOR the asst. yr. 1960-61, Asharfilal filed a return in his individual capacity as well as a partner of the firm. An application for registration was also given. The ITO treated the business income to be the individual income of Asharfilal. He held that the partnership was not genuine. But for some reason the application for registration remained pending and we are told that that it has not yet been disposed of. He also doubted the partition effected in the family of Asharfilal on 3rd July, 1959 to be genuine.;