Law:

Section:

Section 182 of the income-tax act, 1961 - Firm-Assessment-Assessee-huf, comprising karta and his three sons (two major and one minor), partner in firm G carrying on business in pulses-Coparceners effected partition of their share in firm G and formed a sub-partnership for the same-Later on, major coparceners formed another partnership for carrying on oil business and admitted minor to its benefits-Shares of partners not excactly the same in two firms-Whether assessee-firm and another firm are two separate firms and distinct and separate entities for the purpose of assessment-Held, on facts, yes-Whether common partners can constitute two or more separate firms-Held, yes Facts An HUF, comprising karta and three sons (two major and one minor), was a partner with 5/16th share in a firm G carrying on business in pulses. On 30-09-1968, a partition took place in the family, whereby the said 5/16th share in firm G was agreed to be shared by a sub-partnership comprising said four coparceners. The coparceners, accordingly, executed a sub-partnership deed on 1-10-1968, apportioning the profit in four equal shares while the loss, if any, was allocable equally at the ratio of l/3rd by the three major partners only. The ITO granted registration to the said firm. On 26-11-1968, the three major coparceners formed another partnership firm, styled as S, for carrying on oil business and admitted the minor coparcener to its benefits. The profit was agreed to be shared in equal proportion but the loss, if any, was apportionable at 50 per cent for karta and 25 per cent for each of two major sons. This partnership deed stipulated, inter alia, that this second new firm shall not be deemed as part and parcel of the earlier sub-partnership. On 11-03-1971, fresh deeds of partnership were executed as the minor had attained majority and he had elected to become and remain as full-fledged partner in the firms. For the assessment year 1971-72, assessee-firm G filed return declaring a business income of Rs. 57,340, and new firm S filed another return declaring an income of Rs. 35,000. The ITO, however, clubbed the income of both the firms, for the assessment year 1971-72 (and also for earlier…

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