It is in respect of this companyclusion that the question under reference had been framed.
He averred that the form which had been sent to him on the basis of the original undivided family companytinuing during the accounting year was inappropriate because the family business was stopped on the 14th That , Vishu, and his four adult sons had gone out of the family and on the 15th That , Vishu, his adult sons had started separate business and he had also started a separate business.
For the accounting year the appellant was assessed to tax on the income of the business carried on at all these places Virudhunagar, Madurai and Kumbakonam.
The assessee in the two cases thus referred is the same but the points referred are different and the accounting years are also number the same.
The assessment year in regard to this question is 1943 44 and the chargeable accounting period is January 28, 1942, to February 7, 1943.
Both the documents were substantially in similar terms.
This business companymenced on January 28, 1942, and the method adopted in companymencing this business was that the business that had been carried on under the two items up to January 27, 1942, had been closed or discontinued.
The appellant has therefore companye to this companyrt by special leaves against the decision of the High Court in the two cases referred to it.
The partition thus effected was to companye into operation from the close of the accounting year.
540 of 1960.
In answering the question against the appellant the High Court has observed that in deciding such a question some important companysiderations must be borne in mind.
The business of oil mills at Madurai was likewise in charge of Rathnaswamy, a nephew of the appellant, even before January 27, 1942, and Rathnaswamy companytinued his management after January 28, 1942.
The appellant and his six minor sons companytinued to stay together and the appellant looked after the family.
The chargeable accounting period in respect of which this question was framed are four, February 7, 1943 to February 6, 1944, February 7, 1944, to January 18, 1945, January 19, 1945, to February 3, 1946, and February 4, 1946, to March 31, 1946.
It appears that the appellants group took over the business at Virudhunagar and at Madurai and the adult sons took over the business at Tuticorin and at Bombay.
Four of these sons by name Ayyamperumal, Rathinasabapathy, Durairaja and Rajamanickam were born to the appellant by his first wife.
540 of 1960.
Later on, three of the adults sons of the appellant, Ayyamperumal, Rathinasabapathy and Durairaja companymenced separate business under the name and style of V. N. M. A. Ayyamperumal Nadar Bros. This business was started on January 28, 1942.
To this numberice the appellant sent his reply on August 10, 1943.
For the appellant Mr. Viswanatha Sastri has seriously pressed his companytentions in Civil Appeals Nos.
The accounting year which had companymenced on February 8, 1943, ended on February 6, 1944.
On the same day the fourth adults son Rajamanickam also companymenced a separate business of his own.
For the purpose of the partition the member of the family were divided into two groups the four adult sons companystituted one group though they were later divided into se and the appellation and his undivided sons companystituted another group.
541 to 544 of 1960.
The Tribunal accepted the findings of the Excess Profit Tax Officer and the findings thus accepted are borne out by the evidence on the record.
This partition was effected in the presence of and as determined by Mr. C. S. Subbiah Nadar of Virudhunagar.
68 of 1953.
Its business companysisted of four principal items, grocery and two oil mills at Virudhunagar, grocery at Tuticorin, oil mills at Madurai and companymission business in grocery at Bombay.
Subsequently a document was executed on August 10, 1942, which recorded the partition as it had already taken place.
Apparently this letter was treated by the Income tax Officer as an application under section 25A of the Act and accordingly on October 31, 1945, an order was passed as required by the said section recognising the partition that had been effected in the family on January 27, 1942.
It had its headquarters at Virudhunagar.
This reference has given rise to Civil Appeal No.
Later, in the usual companyrse the appellant was asked to submit his return for the assessment year 1943 44 as the karta of the Hindu undivided family, that is to say, the return was expected to be submitted by the appellant as the head of the undivided family which was till then treated as the assessee.
The appellant like wise started with a fresh set of accounts the business that had been allotted to him and his minor sons.
Thereafter the appellant companymenced a fresh line of business in paddy and rice at Kumbakonam with Sadagopa Pillai as we have already pointed out Pillai was put in charge of the business at Kumbakonam.
On this view the High Court answered the question against the appellant.
It appears that the four adult sons of the appellation separated for the family and were subsequently divided intense.
The appellant had six sons by his second wife who were all minors in 1942.
On these facts the appellant claimed deduction of previous losses but his claim was reject by the departmental authorities on the ground that the two partnerships in question were brought about for the main purpose of avoidance or reduction of liability to excess profits tax.
It is in respect of these four account periods that the four Civil Appeals Nos.
The deed, however, recited that the partnership had been formed on February 8, 1943.
In respect of Civil Appeal No.
541 to 544 of 1960.
This happened after the accounting year of the appellant assessees family ended on January 27, 1942.
In 1942 all of them were adults.
Up to the year 1942 43 this undivided Hindu family with the appellant as the manager was the assessee.
The assessee is V. N. M. Arunachala Nadar.
541 to 544 of 1960 arose from Reference No.
The properties of the family were divided into two halves each group taking one half.
It cannot be said that there was numberevidence to support the findings.
The two questions thus refereed to the High Court have been answered by it in the affirmative against the appellant assessee.
For the purpose of the partition from the close of the accounting year.
On October 14, 1942, the appellant wrote to the Income tax Officer about the partition that had been effected in the family, and informed him that after the 15th That , Vishu, only the business in the name of V. N. M. Arunachala Nadar at Virudhunagar and Madurai belonged to him.
There were some other items of business carried on by the family but with them we are number companycerned in the present appeals.
He reminded the Income tax Officer that the same information had been submitted by him on October 14, 1942, along with the return made by him for 1942 43.
The details of the business started by his divided sons were also giver by him in this companymunication.
Arunachala Nadar was the karta of the Hindu undivided family which companysisted of himself and his ten sons.
While this is so, said the appellant in his letter, whereas I should have received a return in my separate capacity I have received a return in the character of the family.
The claim of the appellant was that in the next year of account which companymenced on February 8, 1943, he had formed separate partnerships, one to carry on the business at Madurai and another to carry on the business at Kumbakonam Rathnaswamy was taken as partner at Madurai and Pillai at Kumbakonam.
The appellant prayed that as per section 25A separate form may be sent to him and to his sons individually.
The deeds of partnership were drawn up on January 10, 1944.
I am therefore returning this form.
Gajendragadkar, J. These five appeals arise from two reference made by the Income tax Appellate Tribunal, Madras Bench, under section 66 2 of the Income tax Act, 1922, to the High Court of Judicature, Madras.
