http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 7
PETITIONER: SOHAN PATHAK AND SONS
Vs.
RESPONDENT: COMMISSIONER OF INCOME-TAX, U.P.
DATE OF JUDGMENT: 23/09/1953
BENCH: SASTRI, M. PATANJALI (CJ) BENCH: SASTRI, M. PATANJALI (CJ) MUKHERJEA, B.K. BOSE, VIVIAN HASAN, GHULAM JAGANNADHADAS, B.
CITATION: 1953 AIR 456 1954 SCR 158
ACT: Excess Profits Tax Act (XV of 1940), ss. 4, 5, 10-A-Hindu undivided family-Partial partition dividing assets and liabilities of business among members-Members carrying on business as partners-Validity of partition-Artificial transaction for reducing liability to excess profits tax.
HEADNOTE: A Hindu undivided family carried on business in money lend- ing and brocade. On the 16th July, 1943, there was a partial partition amongst the members by which the brocade business was divided and its assets and liabilities were partitioned in equal shares between the members of the family. On the next day the adult members of the family formed two partnerships admitting minors to the benefit thereof, and carried on the brocade business under two separate firm names though they continued to remain joint in status. The Income-tax Officer accepted the partial parti- tion and treated the brocade business of the family as having been discontinued, but the Excess Profits Tax Officer held that as the main purpose of the partial partition was avoidance of tax, it w...