The legal principle established was that specific property assignments and separate financial dealings can lead to the cessation of a joint Hindu family, impacting its treatment for income tax purposes.

JUDGMENT

Charu Chunder Ghose, J. - In this matter the Commissioner of Income Tax, Bengal, was directed by an order made by this Court on the 13th December, 1927, to state a case for the opinion of the Court whether or not the assessees were entitled to be treated for income tax purposes as a Hindu undivided family. The Commissioner of Income Tax has accordingly stated a case for the opinion of the Court.

2. The facts found by the Commissioner of Income Tax are as follows: It appears that four brothers governed by the Dayabhaga School of Hindu Law named Ganga Sagar, Ananda Mohan, Brojo Mohan and Hari Mohan Shah, who were members of a Hindja undivided family, started a business many years ago. These four brothers are dead and their sons and grandsons are now carrying on the business. The places of business at present are, among others, Calcutta, Dacca and Backerganj, the head office being at Dacca. For many years past, the heirs of the said four brothers have drawn monies separately from the business, the monies being debited to the separate accounts of the heirs of the said four brothers in the books of the business. These heirs separated in mess about 15 or 18 years ago and had been living in four separate houses (the heirs of each of the four brothers living in the same house and in the same mess), the cost of constructing which was drawn from the business and debited to the accounts of the heirs of the said brothers separately. The cost of messing is met separately by each of the four branches and likewise the expenses of marriages and education of children. No family idol being maintained by any of the separate branches of the family, no question of joint worship arises.

3. The Commissioner of Income Tax states that in the books of the business there is no capital account either in the name of a joint family or in the names of the separate branches, but there are accounts in the names of the heirs of the said four original proprietors showing their drawings from the business. The credit side shows either nill or some paltry sum while the debit side in every case shows a large sum. The accounts of the business have never been adjusted and the accounts in the names of the heirs of the said four original proprietors have not also been adjusted. The balances are carried forward from year to year. Further the said four branches have got separate businesses of their own which are separately assessed to income tax. In each of these assessments, a one-fourth share of the main business together with the income of the separate business of the particular branch of the family and the bona fide annual value of the house properties belonging to that branch are taken into account. The house properties were acquired with monies drawn from the main business debited to the account of the respective branches.

4. The Commissioner of Income Tax also points out that the business has through-out been assessed as an unregistered firm and that the four separate branches have filed separate returns of their own income and have been assessed separately since the year 1923-24. In July, 1927, the assesseed in compliance with a notice u/s 38 of the Act give a list of "Angshidars'' (the word "Angshidars" literally translated means sharers). In this return each separate branch of the family was shown to be the proprietor of one-fourth share in the business in question. It also shows not only the names of the male sharers or partners but also of female and minor partners.

5. On the case as submitted by the Commissioner of Income Tax it has been argued on behalf of the assessees that in law the said four branches ought to be regarded as members of a Hindu undivided family and that the business in question ought not to: be assessed as an unregistered firm.

6. Now, every Hindu family is presumed to be joint in food, worship and estate; Under the Dayabhaga Law each co-parcener takes a defined share. The essence of a co-parcenary under the Mitakshara Law is; unity of